EU politicians back narrow loopholes in clean car law

Reuters News
Posted: Mar 17, 2013 8:17 PM
EU politicians back narrow loopholes in clean car law

By Barbara Lewis

BRUSSELS (Reuters) - EU politicians backed a compromise on Tuesday that would give carmakers limited leeway in the race to cut CO2 emissions in line with targets while rejecting German calls for more lenient rules.

The issue of how strictly to enforce European Union (EU) efficiency rules to reduce fuel use, curb reliance on expensive oil imports and lower greenhouse gas emissions has divided the car industry.

The goal is measured across a car manufacturer's fleet of vehicles.

Germany, home to carmakers such as Daimler and Volkswagen, has led demands for loopholes, known as supercredits.

These would enable manufacturers to carry on making powerful, more polluting cars, provided they also made very low emission vehicles, such as electric cars.

The European Commission is seeking to enforce a goal for the EU car fleet of 95 grams of CO2 per kilometer (g/km) by 2020, down from 130 g/km by 2015.

On Tuesday, in the first of a series of European Parliament votes, the industry committee, regarded as the most pro-industry of the committees, voted to cap the extent to which supercredits can be used at 2.5 grams of CO2 per kilometer per year.

"The compromise on supercredits strikes a balance, giving industry more flexibility and incentives to invest in low carbon cars while not watering down the agreed 2020 target," British Liberal Democrat Fiona Hall, who steered the committee debate, told Reuters.

"A 2.5 gram cap per manufacturer per year equates to low emission vehicles being eligible for supercredits up to the point where they account for around 6 percent of total EU car sales each year."

While non-binding, Tuesday's vote is a test of the parliamentary mood. Ireland, current holder of the rotating EU presidency, is seeking a political agreement on the law before the end of June.


Campaign groups oppose to any dilution of the EU's CO2 reduction targets.

"Supercredits weaken the regulation. This is 2.5 grams of fuel economy that drivers will not achieve, 2.5 grams of carbon dioxide that is emitted into the atmosphere," Greg Archer, a program manager at Transport & Environment, said.

The Commission has used modeling to predict that implementation of a 95 g/km target for cars by 2020 and 147 g/km for vans would result in fuel savings of 160 million tons of oil equivalent over the decade to 2030.

In financial terms, research has foreseen annual gains of 33 billion euros ($42.76 billion) by 2030 to feed into the wider economy, as households and business pay less on fuel. It also predicted high-tech jobs would be created.

Germany and its carmakers have meanwhile pressed for unlimited supercredits. But a Commission document, seen by Reuters, said the German proposals undermined the plans to limit emissions.

EU diplomats, speaking on condition of anonymity, refuted that view, questioning the data used by the Commission analysis.

The EU has led attempts to cut vehicle emissions as part of its efforts to tackle climate change, but the United States is catching up.

U.S. President Barack Obama has launched clean car standards which he said would nearly double fuel efficiency by 2025 compared with that of vehicles already on the roads.

Comparison is not precise, but non-profit research organization the International Council on Clean Transportation said the U.S. standards equated to 93 grams of CO2 per kilometer by 2025, for ordinary cars, excluding sports utility vehicles.

The oil and refining industry has stayed on the fringes of the debate in Europe. Some oil companies recognize the need for increased energy efficiency and lower carbon emissions, although they have tended to place the emphasis natural gas as a lower emissions alternative to coal, or on biofuels.

"Energy efficiency is absolutely key," BP Chief Executive, Refining and Marketing, Iain Conn told a Brussels debate at the weekend. "We need to move towards a period of less energy and pragmatic pathways to lowering carbon emissions." ($1 = 0.7717 euros)

(Editing by Jason Neely)