The world is watching

In the debate on Europe’s proposed fuel efficiency law for new cars, MEPs could be forgiven for thinking that the only people that care about the outcome are carmakers and the environmental movement.

The discussion, as a result, has often reverted to a polarised and outdated ‘industry versus environment’ argument. That is a shame, because rarely has there been an opportunity at European level to create so many winners with a single piece of legislation; so many winners, and though carmakers will tell you differently, no losers.

Let’s start with the car industry. First, carmakers are only one part of the broader car industry. About 70 per cent of the value-added of a car comes from suppliers – producers of stop-start devices and hybrid drive trains, specialist automotive engineering firms, ICT suppliers, makers of light-weight plastics and metals … the list goes on.

Their voices are not heard because they are afraid that if they speak out for their own interest they will upset their customers: the carmakers. Yet they stand to get a massive boost from new car fuel efficiency standards.

One exception has been the boss of one of the biggest suppliers, Valeo, who asked a reporter last year, “Why isn’t there a law stating that the target of 120 grams of CO2 emissions per kilometre applies today, rather than in five years?”

He went on to say that Valeo has already developed systems capable of reducing current car emissions by 30-40 per cent. But this is one exception; the rule is that carmakers complain and their suppliers obey and stay silent.

There are other positive impacts: CO2 emissions from cars are directly linked to consumption of petrol and diesel, and therefore this law does not just have huge environmental benefits, but its implications for Europe’s energy needs are equally impressive and will reverberate around the world. The huge instability in the price of oil is felt by every European when they fill up their car or buy goods and services that depend on transport.

A car that is 25 per cent more fuel efficient typically saves its owner €5000 over its lifetime. That makes this law the single most important measure the EU can take to help Europeans cope with their fuel bills. That the EU now spends €1bn every day on oil imports, from just a handful of politically sensitive countries, should be felt by every policymaker.

Strangely enough, there are plenty of MEPs who worry about Russian power play and at the same time resist tough standards for car fuel efficiency. We are truly addicted to oil and this law can help us end that addiction.

The media coverage of parliament’s environment committee vote highlighted, with great clarity, the way Europeans view this issue. It was seen as a victory of the public interest over the narrow interests of a handful of politically powerful carmakers. That is the way democracy is supposed to work.

Conversely, the compromise package hammered out by the car industry and their supporters, and rightly thrown out by the committee, would have been seen as a sop to special interests by a public already cynical about how in touch politicians are with their concerns.

If passed, that deal would have been no more effective than the failed and discredited voluntary agreement signed a decade ago. It would have meant less progress in the next five years than has been made in the last five.

Europeans need to be convinced that the car industry is going to have to make credible and substantial improvements in fuel efficiency and that robust penalties will be in place to ensure they deliver this time. We urge parliament and environment ministers to back a strong law, with no loopholes. Europe, and the world, will be watching.