European Parliament and Council Reach Agreement on Automotive CO₂ Regulations

2 December 2008

Following a series of meetings between Members of the European Parliament (MEPs) and the French Presidency of the Council, the two sides have informally agreed upon the details of future targets on CO₂ emissions from cars. The compromise identifies a longer-term reduction target; allows phased-in implementation of the shorter-term target; and reduces proposed penalties against carmakers that exceed the limits.

The informal compromise is based on the Commission’s proposed target of an average of 120g of CO₂/km for new passenger cars (M1 category) by 2012, compared to the current levels of 160 g/km. A target of 130g/km is to be reached by improvements in vehicle motor technology; the subsequent 10g/km reduction is to come from other technological improvements and by an increased use of sustainable biofuels. Key elements of the compromise include:

• Long-term target: the compromise introduces a long-term target for 2020 for the new car fleet of average emissions of 95 g CO₂/km;

• Phase-in: the compromise says that manufacturers will be given interim targets of ensuring that average CO₂ emissions of 65% of their fleets in January 2012, 75% in January 2013, 80% in January 2014 and 100% from 2015, comply with the car manufacturer’s specific CO₂ emissions target. The original proposal required 100% implementation in 2012.

• Excess emissions premiums: the compromise provides that manufacturers exceeding the carbon dioxide targets set by the regulation will have to pay the following fines (so called excess emissions premiums):

  From 2012 until 2018:

  • €5 Euro for the first gram of CO₂
  • €15 Euro for the second gram of CO₂
  • €25 Euro for the third gram of CO₂
  • €95 Euro from the fourth gram of CO₂ onwards.

  From 2019 manufacturers will have to pay €95 euro for each gram exceeding the target. The Commission had proposed starting fines at €20 per gram over the limit in 2012, rising to €35 in 2013, €60 in 2014 and €95 in 2015.

• Mass-based targets: the CO₂ targets for passenger cars is to be defined as a function of the utility of the cars on a linear basis. Mass is the initial parameter selected. Data on alternative utility parameters such as footprint (track width times wheelbase) is to be collected in order to facilitate longer-term evaluations of the utility-based approach. The Commission should by 2014 review the availability of data and, if appropriate, submit a proposal on adapting the utility parameter.

  The original proposal noted that in establishing targets, the projected evolution of new cars’ mass until 2012 should be taken into account, and potential incentives to increase vehicle mass just in order to benefit from a consequential increase of the CO₂ reduction target should be avoided.

Emissions from passenger cars account for 12% of overall EU emissions of carbon dioxide (CO₂), according to European Commission’s figures. The new regulation is part of the EU’s effort to reduce CO₂ emissions by 20% by 2020.

The compromise reached on Monday evening still needs to be endorsed by the full Council and put to a first reading vote at Parliament’s December plenary session in Strasbourg.

Resources

• Text of the document outlining the deal (via the PSE, the broker of the deal)