Fuelling Italy's Future. How the transition to low-carbon mobility strengthens the economy

This report assesses the economic costs and benefits of decarbonising passenger cars in Italy. A scenario approach has been developed to envisage various possible vehicle technology futures, and then economic modelling has been applied to assess impacts. The study follows a similar approach to that of the 2013 and 2018 Fuelling Europe’s Future studies. The analytical team was composed of Cambridge Econometrics, Element Energy and CERTeT BOCCONI. The analytical team worked in coordination with European Climate Foundation (ECF), ENEL Foundation and Transport & Environment to assess the likely economic impacts and the transitional challenges associated with decarbonising the Italian car fleet in the medium term (to 2030) and the long term (to 2050), as well as the likely impact on citizens’ health and the health system. This technical report sets out the findings from the analysis. It provides details about the charging infrastructure requirements, technology costs and economic impacts of the transition to low-carbon mobility. The study shows that, while there are potentially large economic and environmental benefits associated with decarbonising passenger car transport in Italy, there are also transitional challenges which must be addressed if the benefits are to be realised. In recent years, there has been a strong push to decarbonise transport in Europe, including the publication in late 2017 of draft emissions reduction targets for 2025 and 2030. There have also been announcements from OEMs regarding deployment of advanced powertrain models across their ranges, signalling how rapidly the landscape is changing. The potential benefits if Italy embraces the transition are substantial: • Reduced use of oil and petroleum products will cut energy import dependence and bring about large reductions in carbon emissions. • There are net gains in value added and employment gains which increase as oil imports are reduced over time. In 2030, the TECH scenario would lead to an increase in GDP of 0.12% compared with a ‘no change’ case, and an increase in employment of around 19,000 jobs. • There is substantial potential for EV and grid synergies using smart charging strategies to shift EV charging demand away from peak periods to periods of low system demand. This would mitigate the challenges to the electricity system posed by EVs, limiting increases in peak electricity demand. • For the consumer, the four-year total cost of ownership of ZeroEmission Vehicles is likely to converge towards that of conventional petrol and diesel cars in the next decade. However, our modelling, in combination with insight from the Core Working Group, also highlights a number of transitional challenges: • The implementation of a rapid charging infrastructure will require investments reaching around €465 million per year by 2030. A determined and joint effort from industry, government and civil society is needed to deploy sufficient charging infrastructure. Timing, location, capability and interoperability are key issues. • The transition to low-carbon mobility causes a wide range of impacts on employment across several sectors. Employment in the automotive sector is a little higher in our central scenario than in the ‘no change’ case until 2030, during which time climate goals are met through a balanced mix of hybrids, plug-in vehicles and increasingly efficient ICEs. After 2030, the transition to electric mobility will increase employment in sectors such as electrical equipment, as well as services, but is likely to have an adverse impact on employment in the automotive value chain. • The transition will challenge the competitiveness of the Italian auto industry, requiring the sector to innovate to move towards the cutting edge of clean technology innovation, in order to maintain market share.