Mr. Pierpaolo Cazzola:

I thank the committee for inviting me to contribute to its work. I am adviser on energy, technology and environmental sustainability at the International Transport Forum, which I joined in 2019. Prior to this, I worked for the International Energy Agency, United Nations, European Commission and the environment directorate of the Organisation for Economic Co-operation and Development. The ITF is a global transport policy think tank with 63 member countries that span the world and are not limited to OECD members. We are grateful for our co-operation with our member country, Ireland, who has held ITF's presidency in 2020 and 2021.

I was invited to focus on the subject of electric vehicles. I understand that the main aim of the committee is to ascertain how Ireland can achieve emission reduction targets and other desirable outcomes. I will build on a number of publications that were published by the ITF and the International Energy Agency and, in particular, those on which I had the privilege to lead.

The first point I wish to make is that I see electric mobility as a key pillar of transport decarbonisation but not as the unique solution or silver bullet. It is important to bear in mind that deep cuts in emissions will require measures beyond the electrification of vehicles into the space of what are typically called "avoid and shift" measures. Additional action also needs to be taken throughout the life cycle of all emissions of vehicles, including in manufacturing, energy production and distribution, infrastructure construction and operational services. That is another key point to bear in mind when looking to what can be done through EVs and beyond.

The transition to EVs should also be seen in the broader context of other megatrends that can have positive impacts on economic productivity, in particular, digitalisation and the falling costs of renewable energy. It is something that helps make the case for the transition to electric mobility and electric vehicles. Further to this, it is also important to look at the context of policies and market developments that are geared towards the promotion of innovation and the fact that they have been key determinants in strong developments in cost cuts in the past decade for emerging low-carbon technologies. It is clearly the case in respect of batteries, which are key components of EVs, but also for other technologies that are essentially related to the renewable energy space such as wind and solar-generated electricity. These developments have had major impacts and have caused shifts in the capital markets and have led to the increase in market capitalisation of specific automakers and energy companies that excel in the electric mobility and renewable energy space. My impression is that Covid-19 has further accelerated these processes, as many Governments have been putting in place stimuli aiming to drive a recovery subject to lower financial, climate and sustainability risks.

Electric and digital technologies allowed new actors to enter the transport vehicle, service and energy markets. It is related to the shift in capital observed in the capital markets. I will not name companies individually but I am sure all members are aware of different companies whose market value has been rising significantly in recent years. Many of them operate in the EV and renewable energy spaces. From all of that, I expect to see an acceleration of both policy action and private sector investment in the space of clean, connected and autonomous vehicles, including EVs. As connected and autonomous vehicles are likely to increase travel demand, it will be important for Governments interested in reducing greenhouse gas emissions to look at ways to manage those impacts. It is important for some of the recommendations I will outline later. I will return to the point then.

In the near term, policy support is still required to get EVs and, in particular, cleaner vehicles more generally, into the market.

This will require a clear vision and the establishment of technical standards and regulations to ensure the safe operation of these vehicles. It also requires a conducive energy taxation and pricing framework. Ambitious public procurement programmes can also help to get the first electric vehicles on the roads or to scale up the number of vehicles already on the road. Economic incentives have been widely used to orient consumer preferences towards electric vehicles.

Tomorrow, major announcements will be made about regulatory requirements by the European Commission. These are also important to make sure there is greater market penetration. Given the impact of the change in the energy mix, there will also need to be policies to address aspects related to networks for the distribution of low carbon energy, in particular electricity and the deployment of charging infrastructure in the case of electric vehicles.

My take on this is that a transition to direct electrification of vehicles and renewable energy is likely to be the best fit for the cost transition towards low-carbon transportation of all the vehicles and fuel technologies we have available. However, there will be a bridging phase in which the cost will need to be reduced. The regulatory framework also needs to allow electric vehicles to stabilise the electricity network and capitalise on digital technology to better align demand and supply. There are challenges with regard to resource efficiency and sustainable supply chains that will need to be properly addressed through regulatory frameworks and other policy solutions. I am happy to go into greater detail on them.

We also believe governments should prepare for a transition from fuel duties to road pricing. By the time many electric vehicles will be on the road there will be less government revenue available from fuel taxation and there will still be a need to pay for the infrastructure. It will be important to ensure there is a mechanism to allow them to raise funds to continue to pay for road transport infrastructure. The ITF has been advocating for the development of distance-based charging. This requires a number of regulatory developments to enable it. As I mentioned earlier, these are also important to manage the transition towards digital and autonomous vehicles, which will also have an impact on activity and demand. Covid-19 packages can support the roll-out of charging infrastructure but it will be important to make sure public spending is addressed to areas where private investment would not be able to cover transitional changes. This would be where it is harder for private investment to ensure the availability of chargers.

Governments should also prepare for the impact the sustainable mobility transition to EVs and renewables will have on jobs, skill sets and social equity. This is important. I also want to stress the importance of ensuring that as countries transition towards e-mobility, they are also able to grasp part of the value chain that comes with it. It will be possible for their economies to benefit from the transition. This is the same story for a transition to renewable energy. I thank the committee for the opportunity to contribute.