European Green Cars Initiative Budgets $7.5 Billion, Focus on Electrification of Road Transport

The European Green Cars Initiative is one of the three Public Private Partnerships (PPPs) included in the European Commission's recovery package. The budget for this initiative is expected to be $7.5 billion (€5 B) to boost to the automotive industry in a time of economic hardship, and support the development of new, sustainable forms of road transport. Of this financial envelope, $6 (€4) billion will be made available through loans by the European Investment Bank (EIB), and $1.5 (€1) billion through support to research, with equal contribution from the Seventh Framework Programme for Research (FP7) and from the private sector. The scope of this initiative is broader than the two other PPP, and research is just one part of it. Several coordinated calls for research proposals were launched in July 2009. These financial support measures are supplemented by demand-side measures, involving regulatory action by Member States and the EU, such as the reduction of car registration taxes on low CO2 cars to stimulate car purchase by citizens.

Greening road transport is necessary to achieve EU and world targets in emissions reductions. In the EU, 19% of total EU greenhouse gas emissions and 28% of CO2 emissions in 2005 are linked to the transport sector. More than 90% of total EU transport emissions are due to road transport. While total EU emissions declined, transport emissions increased continuously between 1990 and 2005 due to high growth in both passenger (28 %) and freight transport (62 %).

Research is underway to develop sustainable transport methods. Such "eco-innovation" will serve both to protect the environment, and to offer competitive advantage to those seeking to create new innovation-driven markets. Nanotechnology is expected to play an increasing role in making road travel greener by reducing car weight, increasing fuel efficiency, and improving battery and fuel cell functions.

Despite its name, the Green Cars Initiative is not only for passenger cars. Under the Green Cars Initiative, the research topics include:
• Research for trucks;
• Research on greening internal combustion engines;
• Research on bio methane use;
• Logistics, transport system optimization; and
• Research on electric and hybrid vehicles, notably research on:
o High density batteries;
o Electric engines; and
o Smart electricity grids and their interfaces with vehicles.

Under FP7, four Calls were launched in July 2009 to implement the Green Cars Initiative, with an overall budget of around $150 (€100) million. The Commission's Directorates-General for Research, Transport and Energy, and Information Society will each launch Calls that focus on electrification of road transport, along with a fourth, joint call on Electric Batteries. In other words, the funding for road transport projects under FP7 in 2010 will all be focused on the electrification of road transport and research into hybrid technologies; a critical mass which is expected to produce a step change in innovation in these technologies.

In the following FP7 Calls, in 2011, the topics for projects to be funded should broaden to the other areas of the Green Cars Initiative: research into trucks, internal combustion engines, logistics, and intelligent transport systems. In 2011, there could be also a Joint Call on “smart grid and recharging systems” between several services of the Commission.