Association, Inc.

Issue No. 1, 2008

Commission moves towards binding measures to tackle CO2 emissions from new passenger cars

Until recently, the European Commission's CO2 emissions-reduction strategy was based on voluntary commitments by the car industry, which pledged to improve new-vehicle fuel efficiency on a gradual basis.  Despite the significant progress achieved in this area by European, South Korean and Japanese manufacturers, the European Commission announced in 2007 that binding legislation had become necessary.  The Commission’s draft proposal for a Regulation "Setting emission performance standards for new passenger cars as part of the Community's integrated approach to reduce CO2 emissions from light-duty vehicles” was introduced on 19 December 2007.

The proposal sets out how car manufacturers should reduce CO2 emissions through improvements in vehicles and engine technology.  The main elements of the proposal are as follows:

"Excess emissions premiums" will be applied to car manufacturers for each g/km of CO2 emitted above their individual fleet target, multiplied by the number of vehicles sold.  These penalties will be progressive over a four-year period: €20 per g/km in 2012, €35 in 2013, €60 in 2014 and €95 in and after 2015.

The proposal has been forwarded to the European Parliament and to the Council of Ministers, the European Union’s "co-legislators".  Members of the European Parliament and Member State representatives must now negotiate the final shape of the legislation under the co-decision procedure.

The European Parliament is expected to push for the adoption of this proposal at first reading, ahead of the European Parliamentary elections scheduled for the first half of 2009.  It seems likely, however, that the proposal will not be adopted during that time frame.   

Meanwhile, JAMA and European manufacturers alike are making significant R&D efforts to achieve further reductions in CO2 emissions.  JAMA believes that these investments should be acknowledged and that if CO2-related penalties are imposed, they should, accordingly, be done so at appropriate levels.

The development and production cycle for a new car model, from the earliest design stage to its entry in the market, is a long process requiring at least seven years.  JAMA therefore maintains that the proposal should provide for a longer lead time.  JAMA also believes that the "integrated approach" should be adopted, with the CO2 reduction burden being shared among all the stakeholders concerned.  Until now, much of this burden has been placed on vehicle manufacturers.  It is widely acknowledged, however, that road-transport CO2 emissions will not be substantially reduced solely through breakthroughs in automotive technology.

Since global warming came to the forefront in the 1990s, JAMA members have worked assiduously to minimise the environmental impact of their products and to promote a variety of environmental measures to curb global warming and improve air quality.  JAMA looks forward to maintaining a constructive dialogue with EU decision-makers over the course of the coming months and to the emergence of a final legislative text that is balanced as well as ambitious.