António Guterres, Secretary-General of the United Nations, ensured leaders of the G20 to aim for net zero “as close as possible” to 2040 while suggesting emerging nations to set 2050 targets, at two climate press conferences earlier 2023. However, the hit of post-pandemic economic crises has led to decreased subsidies and changes in major environmental plans, leading to the recent decreased sales of eco-friendly vehicles –– one most important factor for net zero commitments.
To find some description about the recent apprehension of the eco-friendly vehicle market and its related United Nations net zero commitments, Ewha Voice met experts of automotive research, economic analysis, and energy technology.
Seohyun Lee, Senior Researcher at the Industry & Policy Research Laboratory of Korea Automotive Technology Institute (KATECH), also an Ewha alumna, shared her research and thoughts on the international electric vehicle industry along with its relations to net zero commitments.
KATECH is a research institute established in 1990 to support auto parts companies and government-related ministries by researching and developing various technologies and contributing to the development of South Korea’s automobile industry. With the change in trends of the automobile industry mainly caused by the rise of future cars, a department specializing in industrial analysis and human resource training has been established, where Lee mainly works to analyze automobile-related policies and industrial trends.
Lee explained that of the global electric vehicles sold in 2022, 93 percent were sold in Europe, the United States, and China. However, as developing countries are working to switch to eco-friendly cars and manufacturers trying to reduce costs and expand lineups, electric vehicles are expected to be sold to more diverse regions and various consumers.
Another significant trend in the electric vehicle industry is that countries with noticeably higher market penetration rates tend to reduce or abolish the subsidies for electric vehicle purchase around 2023. To add, several countries, including the United States and France, have recently introduced protectionist policies such as subsidizing purchases to favor national manufacturers.
Although electric cars are generally perceived as eco-friendly due to its low carbon dioxide emissions, the environmental and economic effects depend on the technological advancements of battery recycling and reuse. Therefore, manufacturers today are focusing on effective battery management and recycling systems, as the technology will decide the price competitiveness of different electric cars.
In relations to the United Nations net zero commitments, Lee emphasized that the supply of electric vehicles may not only work positively when interpreted in wider perspectives. Using original engine vehicles for a longer time is desirable in terms of carbon neutrality than buying a new electric vehicle, and even a slight damage to the electric vehicle battery jeopardizes the vehicle’s safety, leading to disposal of the battery or entire vehicle. Whereas long-distance driving by electric vehicles can lead to the goal of carbon neutrality, early disposal can rather have an adverse impact on the environment.
Lee stated that the paradigm change to electric vehicles is also impactful in the economic and industrial structure, as it may serve as an opportunity for some countries and companies to gain new industry leadership.
“The automobile industry, both traditional and conservative, has always been difficult for new manufacturers to enter,” Lee said. “Although business reorganization in existing companies and the survival of component manufacturing companies will be an issue, there seems to be more opportunities for new companies.”
Byunguk Kang is Head/Research Fellow of the Energy Demand and Supply Research Team at the Korea Energy Economics Institute (KEEI), a national research institute conducting research activities to establish national energy policies.
Kang explained that when looking at eco-friendly vehicles in the perspective of its customers, one big economic advantage would be its low fuel costs compared to gasoline or diesel. Although its charging fees have risen compared to the early supply of electric vehicles, maintenance costs can still be seen as very low. However, the high initial purchase costs can be one disadvantage, leading its subsidies to play significant roles in increasing the sales of electric and hydrogen-fueled vehicles.
“It is true that recent supply of electric vehicles has been slightly slowing down, with lower subsidies, battery stability issues, and still insufficient charging infrastructure being the reasons,” Kang said. “In order to continue expanding the supply of electric vehicles and achieve 2050 net zero, these obstacles have to be well understood not only by the government and business sectors, but also by individual customers.”
Professor Sanghun Lee from the Graduate School of Climate and Energy Systems Engineering, with experience of working at the U.S. National Renewable Energy Laboratory, shared his prospect on electric vehicles and net zero commitments in terms of energy engineering.
In an environmental science and energy engineering point of view, electric vehicles fundamentally have an advantage, as carbon emission is reduced with the use of electricity produced from renewable energy. There is also a positive impact on the environment because there is no gas emission when operating eco-friendly vehicles. However, Professor Lee emphasized that when delving deeper into its Life Cycle Assessment (LCA), problems may rise with the use of Lithium batteries, as the collection, refining, and disposal may lead to major environmental pollution. As electric cars have now started to be commercialized, continuous research and development is necessary to overcome its problems.
“There are some strong regulations being made around the world to overcome these problems and help the commercialization of eco-friendly vehicles,” Professor Lee said. “One of the most important will be the Euro 7 regulations to be operated from 2025, setting strict rules for vehicle emissions where engine vehicles will be almost impossible to fulfill its requirements.”
According to Professor Lee, international society is working for the United Nations net zero commitment in other various sectors too. The Carbon Border Adjustment Mechanism (CBAM), a carbon tariff on carbon intensive products legislated as part of the European Green Deal, is significant as well as recent investment from IT sectors and net zero generators to be used in financial sectors. Additionally, environment and energy academia are working on efficient operation of the renewable energy grid and forecasting technology using weather and climate data for sustainable development in future generations.
“To achieve net zero, attention not only from technology developers but also the public is important as climate crisis affects us all,” Lee emphasized. “As research and development is the basis for development of the eco-friendly industry, I hope all governments provide continuous investment for industries.”