The seventh episode of our podcast is a conversation with Koen Noyens, Head of Public Affairs at Milence.

Koen Noyens explained that Milence will roll out a network of public charging facilities for long-haul heavy-duty vehicles across Europe. The target is to build a minimum of 1,700 charging points by the end of 2027. These charging facilities are expected to work across models and brands.

Welcome to the 7th episode of our Energy Talks Podcast dedicated to the revolution happening in the world of heavy duty vehicles. Ten years ago, it was still seen as impossible to replace diesel heavy truck with an electric one, especially for longer journey. But now it's happening. And companies such as Milence, that we're receiving today, are making it happen. I'm Claire Couet. I'm a Business Development Manager for SGS Inspire based in Brussels, Belgium. I will be your host for this episode. And our special guest today is Koen Noyens. He's the head of public affairs at Milence. Milence is a young but fast growing company born in 2022 as a joint venture between Daimler Truck, the Traton Group and the Volvo Group. Koen, you're going to say more about Milence in a second. Before that, let me just say a few words about your background. You are an expert in EU energy and climate policies, especially on how they impacted power and transport sector. You worked for the Electricity Industry trade association Eurelectric for over 10 years, you have a very acute understanding of the opportunities and challenges related to road transport electrification as you were leading the Brussels office of a global manufacturer of electric vehicle charging stations and charging management software EV Box. So, you were their ahead of office for three years. And may I say you're also proud Belgian working in the EU bubble, which is strangely not very common actually in Brussels. So it's worth noting. Koen, very welcome to our podcast. It's great to have you.

Thank you. Thanks a lot for having me. Happy to be here.

Thank you so much. I'm also thrilled to have my colleague Lucky, Lucky Nurafiatin. You are our senior market analyst for the Asia Pacific region. You're based in Singapore. You brought a massive contribution to our report on EV markets and deployment of charging infrastructure by 2030, that was published last year. And side-note here, our report was focusing on light duty vehicles and passenger cars, but it's in a way, a very interesting reflection point for our discussion today as we see that heavy duty developments also tend to follow light duty vehicle developments. So definitely some similar issues there also in terms of sustainability and raw material access. So Lucky, your role as an analyst is, not only to contribute to report, but also to carry out trainings. You do that on biofuels and you also provide strategic advice to clients on all matters related to fuels and transportation. Of course. Lucky. Thanks so much for being here.

Thank you, Claire. Thank you for the nice words.

You're welcome. So Koen, how do you also see Milence’s mission relate to the business strategies of your founding members?

Yeah, very good. Let me indeed introduce Milence to you as we are somehow the new kid on the block in this space. So, as you rightly mentioned, we were created in July 2022 by the three largest truck OEMs in Europe and they somehow gave us a clear mission, a clear mission to accelerate zero-emission vehicles adoption in Europe, in particular the electrification of long haul heavy duty vehicles. With that mission came a clear mandate, and that mandate was well, you guys need to roll out a network, a public network, of heavy duty charge points dedicated to the long haul, heavy duty vehicles.

So that's really what we're going to do. Build the network that is accessible to all types of long haul heavy duty electric vehicles: across models, across brands. And we've been also giving a clear target. We need to build at least 1700 charge points by the end of 2027. So that leaves us with a few years. We are almost two years operational and well, we are rolling out a network as we speak today. We have one full site operational for charging base in the southeast of the Netherlands, in Venlo. This week, we're opening our first site in France, near Rouen between Le Havre and Paris. So another strategic corridor and well in the weeks to come, there's going to be more. There are sites announced already in Sweden in Antwerp, soon in other European countries as well.

So we're really a first mover in this space, building out these charging hubs, making sure that we provide a signal to the industry. I think that's the second part of your question. How do we relate to the business strategies of our founding members? Well, they somehow they have embraced to a large extent driven by EU emission standards, I must say, the transition towards zero emission vehicles and they realized that well, if they somehow want to have their customers adopt these electric vehicles, these customers, these big fleets will need to rely on, well, a public network of charging. So no single fleet operator will send their trucks from A to B across Europe, if they cannot recharge along the way.

So that's what we need to provide to the industry, a signal that there is a network, there is a dense network that actually they can rely on and that they can be reassured that on the way they have access to, not only high power charging stations but also too, well, the best rest and recharge experience for the driver. So there's two legs in our strategy. There is indeed the recharging experience for the trucks, make sure these trucks get charged as fast as possible within the resting times of the drivers, but also make sure that the drivers on site feel safe, secure, have access to the best services, amenities, etc. So these are let's say, two complementary aspects that we take care of. Well, yeah, this is happening as we speak.

Fantastic. So 1700 charge points by 2027, so that's a bit the target. One thing that you mentioned, the signal to the industry, another element that signals or gives signals to industry is regulation and regulation over last five years has been particularly intense in terms of electrification of the economy of road transport. If you could tell us really what are according to you, the recent regulatory incentives that really have, you know pushed your business or have been a driver for your business?

Well, I think there's two important pieces the European Green Deal, so the set of legislation that got adopted over the last Commission mandate has done a lot for the wider European economy, but for this particular segment, the long haul heavy duty segment with the folks on electrification of it, I think there is two pieces. The one that I just mentioned is the main driver. So the CO2 emission standards for heavy duty vehicles. This is absolutely let's say the one that is, let's say, making the transition possible so last week. As you most likely know, the European Parliament adopted the deal that they made with the national government, so setting indeed specific reduction targets for 2030, twenty 2035 and 2040. So seeing a steep increase of the ambition getting to an almost well, phase out of emissions, so reduction of -90% is now required by 2030, so that in itself will really push the market. Both the OEMs who face the obligations, as well as, let's say the market because, well, we can expect competitive vehicles to to hit the European roads over the next coming next coming decade. So that has been a clear driver for the industry somehow to start adopting these type of vehicles. But it will not be sufficient.

So I mean, one always talks about the puzzle that that is necessary, so. It's about, well, the supply side, the demand side as well as the infrastructure. So all these pieces need to come together on the infrastructure side while also there, the EU institutions did their work by adopted for the first time ever, an infrastructure piece that sets real targets for EU Member States, so Member States have now been given the task, "the obligation", to build or not build themselves, but at least attract private investment to build charging hubs dedicated to heavy duty vehicles along the way. So there are targets for 20/25/2020 seven 2030, so Member States will need to show that by these timelines sufficient capacity. So really, let's say charging hubs with a minimum capacity of power is provided along the strategic so-called TENT core and comprehensive network, which are the major logistic roads, the major highways in Europe. They need to be equipped with sufficient while charging helps within capacity that is also providing a signal to parties like us because what does it mean? Member States actually need to wake up now because they have these targets. They will need to think about: “How do we attract companies like Milence to come to our country? So what about the grids? What about financial incentives? What about local bottlenecks permitting that somehow is blocking or hindering these companies to scale up this this so that that is really let's say.” A target or a trigger for industry to come a long way to help Member States do it. Whichever. So these are two pieces. I think are the the most important ones that have been giving a clear signal to the industry long term visibility and a signal for the short term to to start investing.

Thank you. So we talked about the incentives you already touched upon potential bottlenecks and when you said, the grids etcetera. Could you maybe paint that picture for us? What are really the barriers that you see the bottlenecks that you also from the day-to-day operation of your company that you see standing on the way of these objectives?

Yeah, I would say grids is the the major one. I mean, it shouldn't come as a surprise that we as, new infrastructure operators that want to connect to the grid, add an additional well “headache” to distribution system operators who also already need to cater for the needs of the solar developers, the wind developers. But this is somehow now getting recognized I would say at all levels that electrification of society, including for this particular segment, the heavy duty segment, is happening, it will kick in and that additional political priority needs to be given as to how we're going to upgrade the distribution networks in Europe.

So I can give you a couple of examples. I mean we are building, in the picture that you see here, we're building large charging hubs, so, charge and rest areas. And we talk here about well capacities that range from five megawatts up to 30 megawatts. So eventually these are let's say, small villages, that we're building in terms of power connection. Very often when we come forward with this request towards the network operators, they look at us and say, well, unfortunately today there's there's not so much capacity available for your plants in certain countries. We get on the reservation list or a waiting list and we get no visibility. We get no answer as by when we will be able to get to this specific capacity. That is not helping us. So, we really somehow want to see the regulatory framework improved there. So getting at least more transparency, accountability, as to "by when" grid operators could deliver that capacity. It's not that we need the 25 or the 30 MW capacity today already, but at least a trajectory. So kind of a partnership needs to be established with them so that they say well by that point in time, we will somehow be able to have made the investment and the upgrade of the grid. So that is that is a key element and that comes well together with the necessary planning.

One thing that we that we see is that, I mean, we as Milence, have a clear vision as to how we see the market of heavy duty vehicles electrify along the way. We see a large, very large majority of the trucks become electric at some point in time. That vision is not being embraced by all the network operators out there. That is something, as you rightly said in your introduction, if you would say two or three, four or five years ago, no one was thinking due to the state of technology that these type of vehicles would become electric. Now technology, the economics, the efficiency of these vehicles show that that well, this is this is well indeed the way forward. This now needs to trickle through to the networks. These operators need to start looking into well, what are the different scenarios for verification of this segment? What will it mean in terms of demands, capacity, demand at certain locations at strategic highways, is the is the connections available? So when it comes to planning and investment, there regulators can help the users by somehow asking the market how do you expect these scenarios to grow and to unfold in the coming years, so that they anticipate what is coming that this is incorporated into their planning and they will start building up front. And there is a third element here is that today without going into all these details of it, of the specifics of how the natural monopolies of distributions operators are regulated, but today they do not get the right incentive to build their network. That's because how they get remunerated by the network regulators. So a redesign of that is necessary as well so that they are allowed at least, get an incentive, not a not a disincentive to build up front to build the capacities, anticipating the demand that will come in the next years. So grids: key bottleneck. Second, I would like to add here is, we don't want to just come with a problem or a headache, but we also want to come with a solution. We see a lot of opportunities. I mean we are leasing or buying huge pieces of land that can be transformed into parking and charging hubs. We see an opportunity there to team up with renewable developers, because they face the same problem, so we want to make sure that actually regulators think about all the synergies that are there by combining demand and supply at dedicated locations. So we're not talking about thousands of stations to be deployed scattered across Europe, now we're talking about strategic highways where typically also windmills, for example, get deployed. So, when it comes to urban planning or non-urban planning, planning of let's say connections for both wind, solar, let's think about finding the synergies here, because we will be looking into well storage solutions to combine these type of assets. So that's the second I would like to add, that much more can be done on that front as well.

Very interesting. And just a follow-up question before I give the floor to Lucky. How do you see this on the agenda of the Belgian Presidency because we know you know there is a rotating Presidency of the Council, now it's Belgium. How do you see this? Because wind is definitely something that they care about. Can you comment about that?

Well, I would say there's there's a recognition by the Belgian Presidency that when it comes to investments in energy, infrastructure, electricity, infrastructure, there is a clear need to speed up things. Even yesterday, there was an informal energy Council large part of the agenda was dedicated to the discussion about how can we take the next steps. The European Commission, as you might know, published end of last year and EU grids action plan, which was a communication with soft recommendations, so no hard targets for Member States, but I think it trickled through that Member State need to step up their game, need to somehow become a bit more strict, perhaps work with targets as part of the national energy and climate plans, to look into their how can we make sure that that the investments happen, that we perhaps mobilize even public funding to step up our game? So there's a recognition when it comes to the synergy element. I would say it's not really there yet, although that's not the Belgian level. At least Belgium is a complex country, as you know, at the regional level in Flanders, that recognition is there, there's let's say, when we talk about regulatory incentives, there's today, for example, an open call, an incentive program subsidy program, where these kind of things get promoted. So where the synergy between solar and charging at both private as well as public locations get opportunity to get an incentive, so a grant for deploying this kind of solutions. It is there. But I would say more needs to be done to let's say being able to scale across Europe. So the, the next presidencies need to keep on monitoring progress on the recommendations of the great action plan, in my view or Milence view, I would say we need to get to a more stringent mandate, get grids as a key priority on the European agenda of the next Commission. So going beyond the soft recommendations and the soft approach that has taken so far.

Very good. Thanks a lot for decrypting a bit the complexity behind all of this, and now Lucky, I would like to move to you, and look at other regions of the world because we talk a lot about Europe, but obviously we want to look at what is happening. For example in Asia. What about China? I mean, China has been leading on EV roll out that in general, especially for light duty. So how do you see lucky in general the world moving on, electrification of heavy duty vehicles? What is your take on this?

Thanks, Claire. As you rightly said, Europe is already moving that far. In Asia, currently, yes, most of electric vehicles in Asia, electric vehicles on the road, are light duty vehicles and that includes passenger vehicles and commercial light duty vehciles, light trucks or smaller trucks, it's already been electrified now. China is also leading in heavy duty vehicles. In December alone, last year actually, in China, there were about 5600 electric heavy-duty trucks, medium and heavy duty trucks, were sold in December alone and that combined between battery electric vehicles and hydrogen fuel cell vehicles, (about 1000 units of these actually, the heavy duty hydrogen fuel cell vehicle sold in China). So it's a combination of both. In other countries, we see China-made electric bus as the big ones, electric buses used as public transport, in Indonesia, in Singapore, in major cities in China, in California and in some in Europe, as well. A bit moving away from China to India, most of electric buses are actually made locally, by local companies/manufacturers. So, most heavy-duty trucks are launched in Europe and the US, as Koen rightly said as well. In India, Indian-made electric heavy-duty trucks were just delivered to customers earlier this month. So it's just started in India. In Korea, heavy duty electric trucks started being sold last year. In Japan, as well, even if in Japan it is a little bit different because auto-manufacturers are looking into hydrogen heavy duty fuel cell trucks. So, the ball is rolling for the electrification of the heavy duty sector, albeit it's all at different speed between countries here in Asia.

Thank you. And if you look at the charging infrastructure part, you know, if you compare with what's happening in Europe with Koen mentioning those two, you know, regulatory tools that are helping, what what do you see? Do you have examples that you could mention maybe from certain countries?

Well, as we rightly discussed earlier, charging infrastructure is a primary concern everywhere, whether it's for the light duty or heavy duty is all the same. So, in China, charging infrastructure is ready for heavy duty trucks. Typically, it is set in, you know, industrial sites or on highways. But in China, it is also helped buy battery swapping stations. So, about half of all heavy duty battery electric trucks that were sold last year had swappable batteries. So instead of plugging it in and charging, they just change the battery, swap the battery: the depleted one goes back to the kind of the charging station and the truck will get the fully charged battery. So yeah that's what is happening in Asia. Actually, many of these trucks in Asia operate in a limited environment. For example, in industrial sites, in port warehouses, in mines and steel-making factories. So we haven't really seen that in the long-haul except in China. Interesting fact in Singapore actually: a pilot trial for electric heavy duty fire-trucks. They started about two to three weeks back, so there's one type of something as well. So yeah, long haul trucks are still the most challenging sector to electrify. But operating this kind of vehicles, as we see now, actually is really possible.

Koen, what do you think soon about this battery swapping system?

Well, it's not something that we've been looking into, at the moment I mean. It's something that indeed we know is is is happening in in China quite a bit. I mean, there's particular challenges related to that obviously, specially standardization will be key for that kind of solution to become somehow viable in in Europe. So, it's not, it's not something that we're excluding. I think that there again, market forces somehow will tell us how that will progress, the adoption of these type of solutions. I mean our focus, since let's say this is a very nascent market, the electric market for the heavy duty vehicles, especially the long haul, we need to take the right steps and the steps as well. Let's deploy the technology that somehow is mature, and take the baby steps in deploying new technologies. So that's also what we're doing, we're starting these charging station deployments of 350 to 400 kilowatts CCS charging stations, so with one particular standard. Soon later this year, we will be piloting and then demonstrating the Megawatt charging standards as one of the first players in the market. So that in itself is already, I would say part of the solution that we want to somehow scale in Europe and we'll start with that. But we keep an eye on all types of innovations obviously.

Very good! And Koen another question for you. So, if we look at the whole picture, you know all the solutions to decarbonize road transport, you know, how do you see hydrogen combustion engines? You know, e-fuels? How do you see those other solutions as a threat to what you're doing as something that can complement, you know, so that everybody can reach the objectives? What is your opinion on that?

Yeah, I mean, our mission is about, well, let's make sure we accelerate transition towards clean vehicles, zero emission vehicles. So get rid of fossil fuels in this business. We as, Milence, obviously we're given a clear mandate facilitate the adoption of electric vehicles. That's what we stand for, that's how we facilitate. But it's also well, what we believe. So if you would ask us how do you see that market develop we see well, for reasons, for economic reasons, for energy efficiency reasons, we see that particular technology, so the battery electric vehicle, emerge as the most competitive one in the next 5 to 10 years. We're not excluding any other, let's say, type of alternative fuel solutions. There we say “let the market decide“, by the end of the day, this business is all about, well, total cost of ownership, so maybe that needs to be competitive compared to diesel. So that in itself is all already something important that we need to prove to the market that, well driving electric vehicle is more competitive, is cheaper, than driving a conventional vehicle and energy is well one of the biggest cost component of the total cost of ownership and their electricity, since it's such an efficient, let's say fuel or product. In our view it will indeed deliver that cost competitive solution very soon, even today, adopting certain vehicles from the moment you pass a certain distance in terms of thousands of kilometers, your vehicle will be, let's say, driving your vehicle, will become more competitive than a diesel vehicle. So at the end of the day, all types of solutions are welcome. We have a clear view that electric vehicles somehow will outcompete the rest, at least in in the next couple of years because of, let's say. Also because of the price, when we look at hydrogen for example, there's other industries that also need to decarbonize. They will also face a challenge. So the markets, the demand for hydrogen, for example, will in our view be quite huge. So you need to really get to well, lower prices, in order to have them become competitive solution compared to electric, but we have no crystal ball. So let's see how that develops.

OK. Last question for Koen:iIf you look at maybe the next year, what is crucial to your success?

Yeah, I mean, perhaps a few words about our organization. Because indeed we started in July 2022 and when I joined, we were, let's say 10-15 people. Now we are what is it, 20 months later, and we're more than 150 people. So we're not just growing a network and building a network which comes with its challenges, but also we're growing an organization, we're building an organization. So that's quite exciting in itself, especially because, well as said, we are first mover in this space as far as we know, there's no other company with a single mission focused on electrification of this segment. I mean the next steps is indeed well, the first step is making sure that that we show the market that we're building this network ASAP, so that we are deploying and contracting sites as we speak, so we will be connecting all these logistics hubs, these ports, these airports along major highways. So we will be also well expanding our capabilities in Europe. Today we are present in 14 countries, so we have built up teams, local teams, location and acquisition managers, deployment people that actually build these sites. But that's the network, so the next step of the companies well, at some point, while these trucks will come, the demand will kick in, so you need to then start making sure you offer the right services experiences. So we are investing quite a bit of capabilities in well, all the, let's say, “essential things” that you need to develop and offer next to the hardware, which is while making sure that the charging is reliable, so all the safe secure cyber elements, the energy management of these sites, the booking. So we are developing kind of a “booking solution” so that fleet operators when they want to travel between A & B, they know actually: “At that point in time I can access that charging hub by Milence, I book a charging please from that time to that time”. So when the truck leaves, there's a guaranteed spot. So for example, this is something that we will also offer to the markets, everything that deals with invoicing, that deals with plug and play, so that that the charging experience for the driver in itself becomes smooth. All of that; is also something that we are developing and we'll be rolling out in the next few months and years. Well, I would say an additional element that's going to be important for a company, but for any company moving in this space is, how do we make sure that we scale? So, this is an industry or a nascent market, there's a lot of risk involved in this, so I mean we take quite some risk. Obviously, we have the backing of our shareholders, they put 500 million into our company as a starting point. But well, we would like to see, for the sake of the adoption of electric vehicles, more companies to come forward, so that let's say a large network across Europe is built and given, let's say, the demand-risk that is there, the high Capex (Capital Expenditure) upfront investment that you need to do in order to build these sites, combination of both somehow needs to be addressed and recognized also by, I would say policymakers that when it comes to the next phase. There's a clear need for well, public financing. So that's something that we're looking into as a company as well, making sure that that we have the right conversations with national governments, with institutions like the EIB (European Investment Bank), so that public financing well for the broader climate agenda kicks in, into this business as well. This is clearly needed for companies like us and others to somehow be able to scale and keep on deploying the network. And there is not today a straightforward situation. If you look into how different European or national pots of money are set up, the procedures that you need to follow, the conditions, the requirements as to how they are set. That is, let's say something that where Europe and the EU can still improve quite a bit, but that's another element outside the financing part and how the public authorities and the public space can help. That's a crucial point for, let's say, for us from a business point of view going forward.

And it makes sense because in the end you are a fulfilling a public mission in some way, if you see it like that so..

Exactly…

So you know, why not having access to public financing? One thing, are you looking for more partners or, you know, or potential other companies would want to get involved?

Into our business, in our company, you mean? Well, not necessarily at the moment. I mean, we of course, “partnerships” let's say is the key to the success of our business. We do sign quite a number of partnerships with let's say “commercial parties” in order to get access to our sites with field operators directly. So at the end of the day, this is really about somehow cooperation across the value chain that you need to establish including with, well, for example those that have pieces of land that are running well, concessions, in strategic locations in ports and airports. It's with these type of parties that we sit down and have the right conversations to make sure that we can, in these locations, set up strategic charging hubs. But companies with direct access to, let's say how we are organized, not really. But we would love to see, I would say, more companies coming forward with the same type of ambition, the same type of let's say "vision" as to how we can support the adoption of electric vehicles from an infrastructure point of view. So that's that's for sure welcome.

Thank you. I I think what is really interesting about about what you do is that you also think about the driver experience, which in the end can also be an incentive for companies you know to invest in these type of trucks because they can offer also this added value to the driver, thanks to your facilities.

Yeah, if I may. If I may make a point here, I mean today there's a huge shortage of drivers in the EU. I don't know the exact figure, but the figures from 2022 were about 400,000 profiles out there that are needed. So that's also something that we want to add, to actually create well, an experience when charging the truck that also well, there's a proper service level provided towards these drivers. I mean these people they carry the goods which are let's say the backbone of our industry. I mean I think 80% of all goods are transported over land in Europe. So it's it's crucial that we attract the right people to this business. So we don't want to add to the problem that is there that today there's a lack of parking, a lack of proper spaces, a lack of safe and secure spaces for both the goods as well as the drivers. That's why we're also well implementing a model with safe and secure parking, so all our sites will be certified according to the European standards, offering a certain level of service. So that is crucial to the success also, and indeed can only facilitate and accelerate the adoption towards electric vehicles as well, yeah.

Fantastic, this is really inspiring. Lucky, a comment? Last comment, last word from your side?

Yeah, yeah. Actually I want to make some comments on that as well. What you do in Europe, I don't think we can replicate that in in Asia because Asia is such a very different between each countries.All the developments are different. All the drivers are different, so the the one thing that I saw possible in the heavy-duty sector, it's actually in India and in China, where the goods really going, I mean the backbone of that is really big and very important in in India and in China. And your comments about the driver experience, about the secure the security and the safety of the driver and the goods, I thought it only happens actually in Asia. I didn't realize that it also happened in Europe. So it's something new to me. And yes, the experience because I saw that in in Asia, it's very bad as well. It's just that creating such infrastructure in Asia is a little bit more difficult than in Europe, I guess because of the different terrains, different challenges and the grid as well, and obtaining such area that is big enough to accommodate the immense size of heavy-duty trucks, it's not easy, and that's when the battery swapping options actually come into in handy. Yeah, because to kind of counter the argument of the land required.

Yeah. OK. Very interesting the comparison between the different regions. There are also some benefits of having a single market. I mean, there are some benefits of the all the regulatory machine that we have in Europe that can represent a headache sometimes, they also represent a benefit. Really inspired, but what you guys are doing at Milence, we will continue monitoring your developments. We wish you all the best. We will be back with the next episode also in the future discussing what's in the plans for the next European Commission in terms of transport policy, maybe some interesting developments Koen, related to grids or other topics of interest for you, and I just wish you a great day, both of you. Thanks so much for your insights.

Thank you. Bye bye.

Thank you Claire.