A key component of the EU’s plan to achieve at least a 20% reduction of greenhouse gas emissions by 2020, as compared to 1990 levels, is curbing auto emissions.  A proposed European Commission directive on auto emissions, currently under review by the European Parliament, would, starting in 2012, limit average allowable emissions for new autos in the EU to 130g CO2/km.  Under the proposed directive, additional measures, including the increased use of biofuels, would be imposed to reduce auto emissions further by 2012, to 120g CO2/km.  The proposed directive also specifies a long-term auto emissions target of 95g CO2/km, to be reached by 2020.

The current level of auto emissions in the EU is roughly 160g CO2/km.  Auto emissions in the EU account for about 12% of overall EU CO2 emissions, and constitute the second-largest greenhouse gas emitting sector in the EU.  Further, as the proposed directive notes, greenhouse gas emissions from the EU transport sector continue to rise.

The Parliament’s rapporteur for the proposed directive is Italian Socialist Guido Sacconi, who has defended the ambitious emissions reductions laid out in the proposed directive and suggested that the auto industry undertake emissions reductions comparable to those that other industrial sectors subject to the EU’s Emissions Trading System are being forced to make.  The industry, for its part, has stressed recent gains in efficiency, and warns of the higher costs associated with mandatory emissions reductions, including to consumers.  The Daimler Group’s 2008 Sustainability Report, for example, stresses the importance of maintaining an “optimal balance between aspects such as improved fuel economy, the technology and costs associated with such improvements, and customer utility.”

Many aspects of the proposed directive are controversial, and a September 3, 2008 Opinion of the Parliament’s Committee on Industry, Research and Energy recommends significant revisions.  For one, the Opinion recommends a substantial reduction in the fines to be applied to manufacturers that miss the mandatory emissions reduction targets.  As the Opinion reasons, penalties should be geared to providing incentives for the auto industry to innovate, not weakening its ability to do so.  The Opinion contends that the proposed directive gets this balance wrong, setting fines too high.

The Opinion also recommends a phase-in period for the new auto emissions limits.  While the proposed directive would require that all new autos meet the 120g CO2/km limit by 2012, the Opinion contends that a phase-in period is required in light of the long lead-times for the development and introduction by auto manufacturers of new vehicle platforms.  The Opinion recommends that 60% of manufacturers’ new cars be required to meet the targets in 2012; 70% in 2013; 80% in 2014; and 100% by 2015.

Further, while the proposed directive does not expressly address the application of the reduced emissions targets to foreign-produced autos, the Opinion recommends application of the targets to importers.  The Opinion also suggests additional provisions for the preamble of the proposed directive to underscore the importance of ensuring that the emissions reduction requirements do not adversely affect the global competitiveness of the European auto industry.  Similarly, additional recommended revisions are intended to avoid the introduction of advantages for foreign-produced autos imported into the EU.

The next step for the proposed directive as it winds its way through the EU’s Co-Decision procedure for new legislation is a vote by the Parliament’s Committee on the Environment, Public Health and Food Safety, expected to take place on September 25.

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