The new Law on Energy Competitiveness, which was the second urgent economic proposal of the government of Daniel Nobo and which amends the Law on Energy Efficiency, which has been in force since 2019, foresees that from 2030 all vehicles included in the service of the city and inter-county public transport, as well as commercial, in mainland Ecuador must only have 100% electric drive or drive with zero emissions.

It also establishes that, starting in 2024, the decentralized autonomous governments (GADs), in coordination with the National Board for Electric Efficiency, must prepare studies and implement the necessary infrastructure for this purpose. The law also establishes the establishment of a special fund to help finance energy efficiency projects. This will be fueled by 1% of the registration value of internal combustion vehicle owners, grants and even multilateral loans.

The new energy law also reformed the Law on Land Transport, in the transitional provision of which it was established that from the fifth year after the entry into force of that law, commercial land transport means that meet the authorized service life will be replaced. renewed with electric vehicles. It is now extended to ten years and sets a deadline for GADs to establish the technical conditions for providing billing systems that do not depend on an interconnected system, they must do so by 2029.

But is this transition established by law sustainable? The possibilities are not so clear. The deadline of 2030 is a postponement of the one that already existed in the previous law and which provided for this replacement of units from 2025.

Genaro Baldeón, president of the Association of Automobile Companies of Ecuador (Aeade), comments that he agrees with the energy transition, but explains that the provision of the Law on Energy Efficiency from 2019 was that the electrification of the vehicle fleet should already occur by 2025, and that the new law prolongs the period quite a bit. The fundamental issue is not the year or the setting of the deadline, but the determination of the steps to be followed to achieve the goal. He comments that the fact of the date change shows that not enough has been done to achieve the goal.

He explains that the key issue in replacing public transport units is the cost of changing the technology to a much more comfortable but still expensive one: who will bear that cost?

This is exactly what needs to be discussed. This can be taken over by passengers, municipalities or even the state. Although he recognizes that the Energy Efficiency Fund is mentioned and that it would serve to finance projects related to the energy transition, he explains that there is still uncertainty. It is not known how much they will collect.

For Baldeón, it is important that this path be defined with greater certainty, because otherwise it may happen again that a few months before the deadline expires, it will be postponed again because sufficient progress has not been made.

Additionally, he clarifies that at the moment the technology for trucks, buses and vans already exists, although it is not mass-produced and expensive.

Despite this, Baldeón believes that private companies are trying to improve their production methods and improve them. In this sense, he explains that certain lines of business are better suited than others. In any case, he comments that it is important that there is a discussion like this in order to know what should happen with subsidies. Well, for example, now public policy dictates that it is more economical to have a diesel car, because the state subsidizes it.

Meanwhile, for David Molina, president of the Chamber of Automotive Industry of Ecuador (Cinae), there are currently no opportunities for the production of buses of these characteristics from the national industry. There is neither demand nor incentive for that. Imports are currently tax-free.

Molina believes that the improvement in this law is that it at least establishes that the GADs, who are responsible for transportation, make plans so that this can be fulfilled. The previous law did not foresee this plan, nor the Energy Efficiency Fund, which could somehow support the financing of new blocks. He says that in 2019, when the law was made, investment in infrastructure and transformer stations should have been encouraged, but that did not happen.

For Molina, there is another factor that can help fleets to go through the energy transition, and that is the reform incorporated into the Law on Economic Efficiency, the first economic project of the Government of Daniel Noboa, in which leasing (leasing) of larger means of transport (buses and trucks), which was previously prohibited.

The idea is that companies or carriers can hardly buy their own units, because the costs of this technology are still very high. On the other hand, companies rental or from leasing They can do it. This is how they can move towards electromobility, he points out.

A shift in the energy matrix is ​​on the radar worldwide. For example, in 2021, under the Glasgow Agreement, more than thirty countries, several major car manufacturers, regions and fleet owners committed to the elimination of petrol and diesel cars by 2035 in key markets (and by 2040 in the rest of the world). The aim is to “achieve the normalization of zero-emission vehicles, ensuring they are available, affordable and sustainable in all regions by 2030,” according to the UK’s climate summit chairmanship.

According to Aeade, sales of electric vehicles have tripled in three years, but this level is still at the beginning. In 2021, there were 288 vehicles, 440 in 2022, and in 2023 there were already 770 units sold. SUVs increased from 132 in 2021 to 217 in 2022 and 510 in 2023. On the other hand, the number of pickup trucks decreased: 44 sold in 2021, 57 in 2022 and 41 in 2023. Trucks and buses are the least sold. They sold. Two trucks in 2021, one in 2022 and five in 2023; while two buses were sold in 2021, one in 2022 and two in 2023. (AND)