Legal bumps in the road to greener European transport
Image credit: Michael Flippo/Dreamstime
Organisations hoping to deliver a clean road transport revolution are grappling with quirks of EU and national legislative frameworks.
The European Commission is seeking to have at least 30 million electric vehicles (EVs) on EU roads by 2030 – an enormous increase from the estimated 1.4 million in circulation within the bloc today.
Reaching this goal demands regulations to steer states, companies and consumers in the right direction. But while demand for EVs and other types of cleaner mobility are surging, regulation presents obstacles as well as conduits to the roll-out of cleaner mobility in Europe, and stakeholders will need to address four significant legal bumps in the road to achieving greener transport.
Emerging contractual and liability issues
It is becoming increasingly clear that long-term, standard contracts between landowners/site operators and EV charging-point operators (CPOs) are often unsuitable for the rapid pace of change in policy, legislation and commercial reality governing EVs and alternative-fuel vehicles.
Recent experience shows that contracts with (previously typical) 15-20 year terms have proved unsatisfactory for both sides after just a few years, following new developments. While there is no way of anticipating all future circumstances, parties can avoid issues escalating into full-blown disputes by paying close attention to the flexibility of contract terms.
Disputes between CPOs and landowners
To date, there have not been many specific disputes or enforcement measures in relation to EVs or other types of alternative-fuelled transport in European jurisdictions, but conflicts are anticipated.
In the UK, there have been clashes between some of the biggest CPOs and key landowners on the UK road network, but these have not escalated into full-blown litigation. In similarly densely populated countries, like the Netherlands, conflicts could arise between owners/operators of existing subsurface infrastructure (pipelines, cables etc) and those seeking to install charging infrastructure, if new projects threaten to interfere with incumbent ones.
How this area develops will depend partly on the adaptability of national planning/consenting frameworks and the cost/level of funding available for upgrading existing infrastructure.
Negotiating with DNOs over grid capacity
Generally, distribution network operators (DNOs) in European jurisdictions are confident local grids will cope with the demands of additional EV-charging capacity. This confidence tends to rest on the assumption grids will be progressively reinforced every year.
Ensuring fairness in how the costs of reinforcement are borne is a potentially contentious issue, however, and one that CPOs may start to push DNOs/energy regulators on. One criticism that has been levelled at the way the market works in the UK, for example, is that it facilitates 'land grabbing' by larger, more advanced CPOs, ensuring they obtain the first connection at a site, which the local substation can cope with without needing to be reinforced.
Subsequent CPOs may find the substation needs reinforcing to accommodate them, and be expected to pay for the upgrades. Those with deep pockets may be happy to invest to ensure their own security of supply, but this excludes smaller operators.
While the UK system incentivises this sort of land-grabbing, it is less of an issue in other European countries, which are more open and transparent about grid access and related costs.
How different jurisdictions foster competition is an area that all commercial entities in the EV/alternative fuel transport sector will be watching closely. In 2021, the UK's Competition and Markets Authority (CMA) announced it would not enforce the exclusive rights of motorway service station owner-operators to provide EV charging, and that third party CPOs have the right to install charging points at these service stations.
The CMA secured legally binding commitments from Gridserve, which has exclusive rights covering approximately two-thirds of UK motorway service areas and owns The Electric Highway – a major UK CPO – in this respect.
To date, there have not been any notable similar decisions by competition regulators in respect of CPOs at EU level, however there have been some developments at jurisdictional level. For example, France's national competition regulator, the Autorité de la Concurrence, last year approved the creation of the 'GMOB joint venture', by a consortium of companies to provide EV charging points in Guadeloupe and, in a second phase, in Martinique and French Guiana. This was the French regulator's first decision on EV charging and has been framed as an opportunity to 'study' the market for EV operation, as it assesses how to regulate this area.
So, what happens next? EU legislators are alive to the regulatory complexity undermining the bloc's goal to decarbonise road transport, and the Commission is busy updating directives and formulating new regulations to iron out the kinks. In the meantime, commercial operators are trying to bridge gaps and surmount obstacles themselves, by continuously innovating in their products and systems and signing innovative, flexible agreements that aim to lead, rather than follow the market.
David Haverbeke is an energy and utilities partner at Fieldfisher.
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