'Ban on Internal Combustion Engine Vehicle Sales by 2040' COP26 Global Agreement Faces Numerous Challenges

by Park Pyunghee

Published 09 Nov.2021 17:10(KST)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 9th (local time) that the global agreement on phasing out internal combustion engine vehicles being promoted at the 26th United Nations Climate Change Conference of the Parties (COP26) is facing setbacks.

Major automobile manufacturing countries such as the United States, China, and Germany are showing a lukewarm stance toward participating in the agreement, and global automakers like Volkswagen and Toyota have expressed that it is difficult for companies to join without a government-level consensus. Currently, the COP26 organizers are reportedly attempting to reach a global agreement to ban the sale of internal combustion engine vehicles by 2035 in developed countries and by 2040 in developing countries. Specific details regarding the agreement are expected to be released on the 10th.

According to a UK government official, Volkswagen has indicated that it will not sign the agreement. Toyota Motor Corporation is reportedly still considering its position, but the organizers believe it is leaning toward not signing. Volkswagen and Toyota cite the reluctance of major governments to participate in the agreement as their reason.

Government participation in the agreement is very important for automakers. Phasing out internal combustion engine vehicles and transitioning to an era of electric and hydrogen vehicles requires not only the vehicles themselves but also related infrastructure such as charging stations, making it a business that demands large-scale investment.

BMW has stated that it will not sign the agreement due to "significant uncertainties regarding global infrastructure development." This is interpreted as meaning that government support is necessary for building electric vehicle infrastructure, and it would be difficult if the government does not agree.

Major automobile manufacturing countries such as the United States, China, and Germany have not yet expressed their intention to participate in the agreement.

However, a UK official said, "The United States has not yet clearly expressed opposition," and added, "We expect the United States to eventually agree." This is interpreted as expressing hope that the United States will ultimately join the agreement, given that eco-friendly policies are one of President Joe Biden's key policy agendas.

In the case of China, as the world's largest automobile market, securing China's participation would be the greatest achievement. However, China did not sign the previous global methane agreement and has set its carbon neutrality target deadline for 2060, which is 10 years later than the United States and European countries, making its participation in the agreement unlikely. The organizers are reportedly discussing easing China's internal combustion engine vehicle reduction targets to encourage its participation.

The German government is demanding that the use of some low-carbon synthetic fuels be allowed, but the organizers reportedly reject this, stating that carbon emissions cannot be recognized.

Volkswagen, in particular, has expressed that it is difficult to join the agreement without a clear stance from China on reducing coal power generation. China has already grown into the world's largest electric vehicle market. However, coal power accounts for more than 60% of China's electricity production. Reducing coal power generation could become an obstacle to the growth of the electric vehicle market.

Toyota is showing a lukewarm attitude toward signing, citing that it will take a long time for South America and Africa to enter the electric vehicle era. BMW also refuses to sign, stating that the transition to the electric vehicle era will take longer.