Global Economics

Brussels Seeks Flexibility on Auto Emissions


Carmakers could "average" emissions across their fleets, rather than having to meet CO2 targets for each model

After weeks of internal fighting, the European Commission is set to table this week a proposal suggesting that carmakers may team up to spread the burden of a mandatory carbon dioxide (CO2) emission cap of 120 grammes/km for new cars by 2012.

According to the draft proposal, cited by Reuters news agency, carmakers "should be allowed to average emissions over their new car fleet rather than having to respect CO2 targets for each individual car".

"In order to provide flexibility for manufacturers, manufacturers may agree to form a pool on an open, transparent and non-discriminatory basis for the purposes of meeting their targets under this proposal", the paper says.

This means that a pool of carmakers would be considered as one manufacturer.

"Where manufacturers form a pool, [they] should be deemed to have met their targets under this regulation provided that the average emissions of the pool as a whole do not exceed the target emissions for the pool", the draft says.

However, many crucial elements remain unclear.

Question marks hang in particular over the level of possible penalties imposed when industry fails to meet the mandatory targets.

According to Thomson Financial, Brussels is considering fines ranging from 30 to 90 euro for each CO2 gramme over the limit.

It is expected, however, that the commission's proposal will still see several changes, before it is officially unveiled on Wednesday (19 December).

The first step to the initiative was taken in February, when the EU's executive body suggested that carmakers face a mandatory CO2 emission cap of 120 grammes/km for new cars by 2012.

Under this goal, they should be required to achieve 130 grams per kilometre through cleaner engines alone, while the remaining 10 grammes would come by measures that would not have to be met directly by car makers, but through other contributions such as more efficient air conditioning, the use of biofuels and changes to tires.

The current average of emissions is around 163 grammes -- meaning that the car industry is almost certainly going to miss a voluntary target to cut average emissions for new cars to 140 grammes of CO2 per kilometre by 2008.

However, the EU industry has warned that mandatory cuts would translate into higher costs and job cuts.

"A 130g limit per vehicle through technology alone is not feasible", one industry representative told UK paper Guardian and added that "the sanctions would totally eat up revenues and the level of penalties would bear no comparison with others for infringing EU rules".

The drafting of the sensitive legislation has also seen wrangling between two EU commissioners -- Stavros Dimas in charge of the environment dossier and Guenter Verheugen, the industry commissioner.

Mr Verheugen, coming from Germany -- home to luxury gas-guzzling marks such as Porsche -- has spoken out in defence of German manufacturers of large cars, saying they must not bear the greatest burden in the fight to reduce carbon dioxide emissions.

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