European Commission's compromise: CO2 emissions of 120g/km as a 'virtual' target

After a fierce debate amongst European car manufacturers and individual EU Commissioners over carbon dioxide (CO2) emission reductions from cars (earlier post), the European Commission has finally reached a compromise and proposed a comprehensive new strategy for new cars and vans sold in the European Union. But environmental pressure groups remain disappointed.

Instead of the initial target which was set at 120 grams of CO2 per kilometer (earlier post), the target becomes a 'virtual' one: the commissioners assured the car industry that a 130g/km average would be imposed but that it would not apply to each individual manufacturer but to the industry as a whole, and that further measures, including increased use of biofuel, would mean that cars overall emitted no more than 120g of CO2 per kilometre by 2012.

The European car industry earlier warned that the commission's plans could lead to job losses and factory closures. Industry Commissioner Guenter Verheugen said the EU's approach must not lead to a shift of production abroad, or to European consumers being forced to buy smaller cars from non-European manufacturers. "The motor industry faces a major challenge... I would urge them to face up to it and not consider it a burden but consider it a positive challenge," he said.

Verheugen added: "We will shortly be in a position to provide not only the safest and best cars, but also the cleanest cars - that is the future of the European automobile industry."

The new strategy, together with a revision of EU fuel quality standards proposed last week (earlier post), further underline the Commission's determination to ensure the EU meets its greenhouse gas emission targets under the Kyoto Protocol and beyond.

The strategy will enable the EU to reach its long-established objective of limiting average CO2 emissions to 120 grams per km by 2012 - a reduction of around 25% from current levels (162g). This corresponds to fuel consumption of 4.5 litres per 100 km (52.2 miles per gallon) for diesel cars and 5 l/100 km (47 miles per gallon) for petrol cars.

By improving fuel efficiency, the revised strategy will deliver substantial fuel savings for drivers. To encourage the car industry to compete on the basis of fuel efficiency instead of size and power, the Commission is also inviting manufacturers to sign an EU code of good practice on car marketing and advertising.

This strategy is the most ambitious approach ever and the most ambitious approach worldwide towards the development of a low-carbon economy - which is vital for averting climate change. It is the concrete proof of EU leadership in the field. This will require efforts from all sectors, but also open up enormous opportunities for the EU car industries. I call on the EU's car industries to preserve their long term competitiveness by taking the innovative lead, in the interest of consumers and workers alike." - European Commission President José Manuel Barroso.

Environment Commissioner Stavros Dimas, the staunchest advocate of mandated reductions, commented: "Cleaner, more efficient and affordable cars will help reduce carbon dioxide in the EU, enable us to achieve our Kyoto targets, save energy and encourage innovation. All Member States will need to pull their weight in implementing the measures necessary and have a major responsibility to encourage the purchase of fuel-efficient cars as well as discourage fuel-inefficiency."

CO2 emissions from cars
Road transport generates about one fifth of the EU's CO2 emissions, with passenger cars responsible for around 12%. Although there have been significant improvements over recent years in vehicle technology - particularly in fuel efficiency, which translates into lower CO2 emissions – these have not been enough to neutralise the effect of increases in traffic and car size. While the EU-25 reduced overall emissions of greenhouse gases by almost 5% between 1990 and 2004, CO2 emissions from road transport rose by 26%:
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Reinforcing the EU strategy
The current EU strategy for reducing CO2 emissions from cars is based on voluntary commitments by the car industry, consumer information (car labelling) and fiscal measures to encourage purchases of more fuel-efficient cars. Under the voluntary commitments, European manufacturers have said they will reduce average emissions from their new cars to 140g CO2/km by 2008, while the Japanese and Korean industries will do so by 2009.

However, the strategy has brought only limited progress towards achieving the target of 120g CO2/km by 2012; from 1995 to 2004 average emissions from new cars sold in the EU-15 fell from 186g CO2/km to 163g CO2/km:

The Commission's review of the strategy has concluded that the voluntary commitments have not succeeded and that the 120g target will not be met on time without further measures.

The main measures it is proposing in the revised strategy are as follows:

* A legislative framework to reduce CO2 emissions from new cars and vans will be proposed by the Commission by the end of this year or at the latest by mid 2008. This will provide the car industry with sufficient lead time and regulatory certainty.

* Average emissions from new cars sold in the EU-27 would be required to reach the 120g CO2/km target by 2012. Improvements in vehicle technology would have to reduce average emissions to no more than 130g/km, while complementary measures would contribute a further emissions cut of up to 10g/km, thus reducing overall emissions to 120g/km. These complementary measures include efficiency improvements for car components with the highest impact on fuel consumption, such as tyres and air conditioning systems, and a gradual reduction in the carbon content of road fuels, notably through greater use of biofuels. Efficiency requirements will be introduced for these car components.

* For vans, the fleet average emission targets would be 175g by 2012 and 160g by 2015, compared with 201g in 2002.

* Support for research efforts aimed at further reducing emissions from new cars to an average of 95g CO2/km by 2020.

* Measures to promote the purchase of fuel-efficient vehicles, notably through improved labelling and by encouraging Member States that levy car taxes to base them on cars' CO2 emissions.

* An EU code of good practice on car marketing and advertising to promote more sustainable consumption patterns. The Commission is inviting car manufacturers to sign up to this by mid-2007.

Disappointment
Jos Dings of the environmental pressure group Transport and Environment (T&E) said the 130g/km limit was a disappointing response to the calls last week by a UN panel of experts for serious action on climate change. He said the retreat from Mr Dimas' preferred 120g/km fuel-efficiency target, was a "reward" to the car industry for making insufficient progress to meet a voluntary target of 140g/km by 2008.

He called for the EU to fix an 80g/km limit for 2020.

The European car industry says consumers have so far shown little interest in cars with smaller engines and lower emissions. It also says there are more cost-efficient ways of reducing transport emissions than introducing costly new technology, such as reducing traffic congestion and changing driver behaviour.

Transport is the only sector in Europe that has shown dramatic increases in CO2 emissions over the last 15 years. The car industry has made huge improvements in engine efficiency, but the power, size and weight have cars have also increased rapidly.

As a result, CO2 emissions have only fallen by 23g/km from the 1995 level of 185g/km. Mr Verheugen said a detailed impact assessment would be now carried out, and that discussions would continue with scientists, research institutes, manufacturers and other interested parties.

The proposed legislation is to be drafted later this year. It will then need to be agreed by member states and the European Parliament.