New-Japan Business Consulting
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EU carbon neutrality policy.

While the EU’s vehicle CO2 regulation targets zero emissions by 2035, the intention is to allow the registration of internal combustion engine vehicles that only use eFuel after 2035. While it would be ideal if multiple approaches to decarbonisation could be taken, including a combination of internal combustion and electrification technologies, there is a strong opinion in Europe that the focus should be on investment in BEVs. While the environment surrounding BEVs is becoming more challenging due to inflation, geopolitical issues and obstacles in raw material procurement, many argue that continued investment in internal combustion engine technology is inefficient due to the cost and supply challenges of eFuel. In addition, the rise of Chinese brands with the latest digital technology and highly competitive prices is causing a strong sense of urgency amongst European companies. As competition for sales intensifies, there is a growing belief that investment in BEVs should be stepped up.

While the EU has a wide range of policies, there is a growing concern that these policies are inconsistent and impose a cost burden on the industry as a whole, resulting in a loss of competitiveness. There is growing concern that this will result in a loss of competitiveness. While the IRA in the US has been successful in attracting investment to North America, Europe is finally sharing the importance of coordinating and reviewing policies to support industrial competitiveness. eFuel’s benefits, but also the various challenges to its widespread adoption, must be considered.