There is now increasing pressure on governments, businesses, and other organisations with an influence over the future of the automotive industry and road transport to rapidly accelerate the transition to zero-emission vehicles. At last year's COP26 the "Zero Emission Vehicles Declaration" included a commitment to work towards the sale of all new cars and vans conforming to zero emissions globally by 2040, and by no later than 2035 in leading markets.
The Declaration now has over 210 signatories (up from 130 at COP26) – from national and sub-national governments, to manufacturers, businesses and fleet owners. Such a commitment is a huge step forward, but where are things now in terms of development and what does the direction of travel look like in meeting the targets set?
Where are we on the road to zero emissions vehicles?
The ZEV Factbook finds that passenger electric vehicle sales globally track more than 10 million units, up from 6.6 million in 2021. Over 13% of new car sales globally in the first half of 2022 were electric, rising from 8.7% for all of 2021. Electric vehicles are expected to globally avoid almost 1.7 million barrels of oil use per day in 2022, eliminating 152 million metric tons of CO2 per year.
As part of its commitment to ban the sale of new vehicles with petrol and diesel engines by 2030, the UK Government introduced the requirement for all new cars and vans to conform to zero-emissions status by 2035. The EU has recently established a similar policy requiring; a reduction in CO2 emissions from new cars of 55%; a reduction in CO2 emissions from new vans of 50%; and a 100% reduction in CO2 emissions by 2035 (the same as the UK's).
In the UK we have seen a number of pieces of legislation that encourage the transition to zero-emission vehicles, which in turn sets targets for air quality, imposes product recall measures for vehicles not meeting a "relevant environmental standard" and encourages the roll-out of electric-vehicle (EV) charge points across the country.
Air quality targets
The Environment Act 2021 imposed a legal duty on the UK Government to introduce two new air quality targets by 31 October 2022 in the form of secondary legislation:
- A long-term air quality target (set for a minimum of 15 years) which will specify a standard to be achieved, how it will be objectively measured and at what date it should be achieved by. This is intended to encourage long-term investment and provide certainty for businesses; and
- An ambient air target to reduce particulate matter to an annual mean level of PM 2.5.
The Department for Environment, Food & Rural Affairs (DEFRA) consulted on the above targets and set two proposed targets:
- Annual Mean Concentration Target ('concentration target') - a maximum concentration of 10µg/m3 to be met across England by 2040.
- Population Exposure Reduction Target ('exposure target') - a 35% reduction in population exposure by 2040 (compared to a base year of 2018).
These air quality targets were due to be laid before Parliament by 31 October 2022 in the form of a draft statutory instrument, but this deadline has now passed. There are no further timescales as yet for when the targets will be published following this delay.
Product recall
The Environment Act 2021 introduced a number of provisions to assist with achieving air quality targets, including: financial penalties for domestic smoke, environmental recall of motor vehicles and compulsory recall notices for products that do not meet a "relevant environmental standard". A "relevant environmental standard" is effectively any legal standard that a product is required to meet.
The Secretary of State (the 'SoS') has the power under the Environment Act 2021 to issue a compulsory recall notice (CRN) to a manufacturer or distributor of a relevant product. This notice will require the recipient to organise the return of a relevant product to them, or to any other person specified in the notice, from persons who have been supplied (whether or not directly by the recipient) with the product.
If the manufacturer or distributor is required to organise the return of the product, this may include supplementary obligations on them to:
- Notify recipients of the product that it is subject to a CRN;
- Publicise the CRN;
- Pay compensation to the recipient required to return the product subject to the CRN or modify the product to ensure it meets the relevant environmental standard;
- Prohibit the sale or supply of the product; and
- Destroy or arrange the destruction of the returned product.
The SoS's new compulsory recall powers when introduced will be a significant tool to be used by regulators to achieve environment improvements and it is likely that there will be significant media and coverage whenever such powers are exercised (as well as very significant compliance costs). The burden of future recall costs will fall on the manufacturer who will need to compensate consumers for vehicles that no longer meet "a relevant environmental standard".
EV charge points
Functionality and minimum standards
The Automated and Electric Vehicles Act 2018 gave Government powers through secondary legislation to mandate that all EV charge points sold and installed in the UK have smart functionality and meet minimum device-level requirements.
The Electric Vehicles (Smart Charge Points) Regulations 2021 came into force on 15 December 2021, with the first part of Schedule 1 being brought into effect from 30 June 2022. During the first part of Schedule 1, smart functionality, monitoring and reporting of energy consumption, default smart charging, supplier interoperability and randomised delay functions will be legal requirements in any electric vehicle chargers sold.
From 30 December 2022, the second half of the regulations will be brought into effect – cyber and data security requirements. However, this does not apply to chargers sold before 30 June 2022, but any exchanges after 30 June 2022 will need to comply with the new regulations.
Building regulations and planning requirements
The Government has passed the Building Regulations etc. (Amendment) England (No. 2) Regulations 2021 (the Regulations), which took effect on 15 June 2022 and set out requirements to install EV charge points in new and newly renovated buildings. The Regulations include transitional provisions, which provide that if a building notice or initial notice has been given or full plans have been submitted to a local authority before 15 June 2022, and works commence before 15 June 2023 the building will be exempt from the requirements.
The proposals will impact both buildings undergoing renovations/redevelopment and new buildings that are residential, commercial and mixed use. In respect of each form of development there is a "minimum requirement" and a "surplus requirement", which is relevant either if there are more parking spaces than there are dwellings or in a commercial development context where the total number of parking spaces exceeds 10.
There is a spend cap for new residential EV charge point connection costs of £3,600 per parking space (the Spend Cap). This would also apply to mixed use or change of use to residential where new dwellings are created by development. Where the connection cost exceeds the Spend Cap then the maximum number of EV charge points should be installed, applying the Spend Cap multiplied by the number of parking spaces that require an EV charge point.
The Regulations set a minimum standard for EV charge points, they must have their own dedicated electric circuit and be capable of supporting the vehicles that require access to it (this will therefore need to be considered on a case by case basis).
Looking for more insight?
If you would like to speak to us about any sustainability issues presented in this article, including how emerging environmental legislation may impact your business, please do not hesitate to get in touch with either ben.sasson@gowlingwlg.com or environment partner ben.stansfield@gowlingwlg.com.