Tougher CO2 Targets for Cars: Emission Impossible?

July 20, 2012

In this blog post, T&E programme manager Greg Archer describes the policy and political consequences of the newly-released Commission's proposal on car CO2 emissions. He also tries to figure out the future scenarios that the proposal will be confronted with, once discussed by the parliament and the Council. The phrase "Emissions impossible", mentioned in the title was originally coined by Italian MEP Guido Sacconi.

The European Commission has adopted new legislative proposal confirming that car manufacturers must on average reduce CO2 emissions by about a quarter between 2015 and 2020, from 130 to 95 g/km. This is not bad, but the Commission could have gone further, and should have avoided compromises to accommodate the wishes of influential member states. The background story also sheds light on the political challenges environmental proposals raise in times of economic crisis and illustrates that the European Commission is certainly not a homogenous, rational or entirely independent body.

The Climate Action department (DG Clima) remains committed to measures that decarbonise the European economy, but it is clear that these policies are being effectively challenged by other Directorates and diluted by a cautious Parliament and stubborn Council of Ministers, in which national interests typically dominate issues of common good. In this climate, ambitious environmental policies are only possible with strong economic and societal co-benefits. Fortunately, the new cars regulation delivers a range of economic, consumer and competitiveness advantages. Not by chance did Mrs Hedegaard (DG Clima Commissioner) choose to share the platform for the announcement with the Director General of the European Consumers Organisation (BEUC), highlighting how this policy can simultaneously help to solve the twin crisis of economy and environment.

The nature of the debate has profoundly changed since 2008, when regulatory CO2 targets were first proposed. A diverse range of organisations is now supporting the 95g/km target and improved vehicle efficiency: these include technology suppliers, motoring and consumer organisations, leasing companies (that buy 40% of new cars) and unions. These advocates for the economic  benefits of more efficient vehicles have balanced the declining support for climate and wider environmental policies, to the extent that sometimes we feel the motor industry spends more time talking about the environment than we do!

Throughout the development of the proposal one voice has been notably absent from the debate – that of ACEA, the European motor industry association. Riven by internal divisions (over whether or not to request restructuring support) its contribution has been limited to stating (and endlessly restating), that 95g is “challenging,” despite all evidence to the contrary. In the absence of a collective industry position it has been the VDA (German motor industry association) and BMW and VW in particular, that invaded Brussels with lobbyists to argue manufacturers of larger vehicles should be rewarded with even more generous allowances. The issue was exposed by the media in the UK Guardian, which highlighted the hypocrisy of BMW lobbying to water down European plans to improve the fuel efficiency of cars at the same time as trumpeting its green credentials as the official car sponsor of the Olympic Games.

As the lobbying intensified the Commission became as divided as the motor industry. The European Voice highlighted the “lesson for our troubled times” that the German motor industry lobbying received a particularly receptive hearing within the Commission at the moment German flexibility was needed to move forward on the Eurozone crisis. Some Commissioners argued for their countries’ interests and for weaker targets, in direct conflict with the objectives of their portfolio. Fortunately they were balanced by several others who maintained their focus on their brief and supported the DG Clima proposal.

Partly through good manoeuvring, partly due to the incompatibility of the opposition demands, the original proposal remained largely intact, albeit with small gifts for Germany (additional allowances for heavier vehicles), France (re-introducing credits for electric vehicles), the UK (maintaining the opt-out for Jaguar Land Rover), and Italy (€350M to support research for Fiat). The final deal was sound but could have delivered so much more had national politics and parochial short-term concerns not, as usual, unbalanced the debate.

The arguments now move onto the Parliament where hostilities will be renewed! With just three meetings scheduled in Council during the Cyprus Presidency it will be left to Ireland to deliver the final outcome. This story will run ….

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