Why Beijing’s plan to stop producing petrol and diesel cars could be a game-changer for the industry

Authorities study timetable to put brakes on fossil-fuel vehicles in race to cut emissions and pollution

PUBLISHED : Saturday, 09 September, 2017, 8:22pm
UPDATED : Tuesday, 12 September, 2017, 3:41pm

China is working on a timetable to stop production and sales of fossil-fuel vehicles as it races to develop new-energy vehicles and clear the country’s polluted skies, a senior Chinese industry official said on Saturday.

Addressing a car forum in Tianjin, Xin Guobin, vice-minister of industry and information technology, said China was considering following in the footsteps of some European countries to phase out fossil-fuel cars.

“Many countries have adjusted development strategies ... Some countries have worked out a timetable to stop production and sales of traditional-fuel vehicles,” Xin said.

“Now the Ministry of Industry and Information Technology has launched a study as well, and will work with related departments on a timetable for our country”.

The Netherlands and Norway have already set targets to ban fossil-fuel cars by 2025, with sales after that deadline limited to electric and plug-in hybrid vehicles.

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France also said on July 6 that it would ban sales of petrol and diesel vehicles by 2040 to reduce air pollution and become a carbon-neutral country by 2050. Britain made a similar announcement two weeks later.

New-energy vehicles and batteries are key parts of Beijing’s plans to turn China into a hi-tech powerhouse in the next few decades. The National Development and Reform Commission, the country’s top planning agency, has also said it will not approve any new fossil-fuel car projects.

Xin did not say when China would make the final decision on the plan.

But he did admit the country faced an uphill battle to meet its targets of cutting carbon emissions per unit of GDP by 60 to 65 per cent by 2030, and making non-fossil fuels 20 per cent of primary energy consumption.

Car emissions have been seen as partly to blame for China’s worsening air quality. The Ministry of Environmental Protection said in June that vehicle fumes accounted for over 80 per cent of the country’s carbon monoxide and hydrocarbon emissions and 90 per cent of its nitrogen oxides and particulate matter emissions.

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China is the world’s biggest car market, with nearly 200 million registered vehicles by the end of last year. Only 1.09 million of those cars are new-energy vehicles but officials and industry insiders expect the demand to grow.

Chinese buyers accounted for 53 per cent of the 774,000 electric cars sold worldwide in 2016 and industry forecasters say China needs to make 750,000 new-energy vehicles next year to meet market demand.

John Zeng, managing director of consultancy LMC Automotive, said China was on track to draw level with Europe in new-energy vehicles and emissions cuts by 2040.

“China is following the European countries’ technology road map to develop new-energy vehicles. The announcement of the timetable is to further specify the direction towards new-energy vehicles,” Zeng said.

“The government has given a positive signal to develop new-energy vehicles, but the reality is less optimistic. A sector of low-priced products heavily reliant on government subsidies is far from being a sunrise industry.”

The government said earlier this year it would phase out subsidies for new-energy cars by 2020, replacing them with fuel consumption credits and minimum quotas for new-energy vehicle production.

But global manufacturers have called on China to relax the planned quota system for electric and hybrid cars and requirements for core technology transfers.