The meeting also called for establishing a stakeholder task force to promote lower-carbon cars, and to explore the technical, regulatory and economic hurdles impeding the development and deployment of such vehicles.

Reacting to the industry’s demands for the €40 EU-backed loans package, Jos Dings, director of T&E, Europe’s principal environmental organization campaigning on sustainable transport, said:

The European car industry has spent a decade and a half lobbying aggressively against fuel efficiency legislation. It has simultaneously failed to deliver on its 1998 voluntary agreement with the EU to cut CO₂ emissions. It simply beggars belief that the car lobbyists now come cap in hand to the European Union asking for handouts to develop the fuel efficient cars they should have built long ago. The EU should be very clear, not a cent of public money should be loaned until the car industry drops its attempts to water down EU fuel efficiency legislation.

The current financial crisis is affecting auto industry sales in Europe. New car registrations in Europe fell by 8.2% in September compared to the same month last year, despite two working days extra across the region. Usually, September is a strong month for car sales that tend to pick up after the quieter summer months. In absolute numbers, registrations stalled at 1,304,653 units, or the lowest September level since 1998. Three quarters into 2008, a total of 11,713,937 new passenger cars were registered, or -4.4% less than over the same period of last year.

Better regulation. The aim of better regulation, as outlined by the meeting, is to reduce the regulatory burden on the industry though simplification and assessing new regulation’s impact in advance, to avoid unnecessary costs.

The auto industry is asking EU legislators to enhance the transparency and quality of these impact assessments, in particular with respect to setting feasible long-term targets. Christian Streiff, President of the vehicle manufacturers’ trade association ACEA and CEO of PSA Peugeot Citroën cited the upcoming CO₂ legislation on cars as a key example.

European environment ministers first proposed the reduction of average new car CO₂ emissions to 120 g/km in October 1994; the European Commission announced the target in 1995, with an original achievement date of 2005. The 120 g/km target represents a 35% reduction over 1995 levels. In 1996, the Council modified that to “by 2005, or 2010 at the latest”. In 1998 the European Automobile Manufacturers Association (ACEA) committed to reduce the average CO₂ emissions from new cars sold in the EU to 140 g/km by 2008—a reduction of 25% over 1995 levels. The 120 g/km objective was informally postponed to 2012.

In February 2007 the European Commission announced that it would implement binding regulations on the CO₂ target for the first time. In September, the Environment Committee of the European Parliament voted 46-19 to hold to an average target of 120 grams of carbon dioxide per kilometer from new passenger cars (the M1 category) by 2012. It also voted for a new long-term target of 95g CO2/km for 2020. The current level is around 160 g/km. (Earlier post.)

Acknowledging the reality of the coming legislative framework, while recognizing “differences of opinion” between stakeholders, the CARS21 review called for implementation of an integrated CO₂ reduction strategy by 2020.

For the medium term, stakeholders agree that the next-generation legislative framework for reducing CO₂ emissions from road transport on the basis of an integrated approach should come into force in the 2020 timeframe with the relevant proposals made by 2014 at the latest.

The application of an integrated approach to CO₂ reduction-related regulatory activity should be continued while cost-effectiveness, technology neutrality, sufficient lead time and regulatory predictability should form a core part of implementing such an approach. The integrated approach should cover a broad range of actions to maximize CO₂ reduction potential and achieve cost-effective CO₂ reductions from both new vehicles and the existing vehicle fleet. In principle, all measures which can contribute to reducing CO2 emissions should be included and their application should be encouraged.

However, what concerns that part of the future CO₂ reduction framework, which is subject to quantification (and which can thus contribute and count towards the meeting of targets or CO₂ reduction obligations), it should include all those measures and activities whose contribution is measurable, quantifiable and monitorable. Furthermore, it should enable clear identification of which stakeholders are responsible for delivering the improvements (and, in the case of joint initiatives, to what extent each stakeholder is contributing).

What concerns those pillars, which have thus far been left out of the quantified integrated approach (i.e. eco-driving, infrastructure, traffic management), it should be investigated whether and how it is possible to measure their contribution in the future. If the precise contribution of a measure cannot be determined with full accuracy, its contribution to the integrated approach should be based on a fair technical assessment of the likely CO₂ reduction which they can deliver as certainty has to be provided with regard to their impact being delivered in practice.

Stakeholders agree that the integrated approach is most effective when a strong demand-side framework complements measures taken on the supply side and therefore recognize that taxation policy has an important role to play with regard to consumers.

Finally, the integrated approach, in which individual actions reinforce and complement one another, should be clear and provide a high degree of confidence, predictability and proportionality to all the stakeholders involved. Hence, the overall legislative framework should clearly identify the contribution which the different pillars should make.

The meeting drew a number of other regulatory conclusions, among them:

• Revising the current New European Drive Cycle to improve its correlation to modern real world driving conditions.

• Developing a World Light Duty Test Procedure at the UNECE.

• Apply the World Heavy Duty Cycle at a global level.

€40B low-interest loans package. The low-interest loans package would help secure a sustainable market for current and newly developed fuel-efficient technologies, according to the industry. Details of such a package are currently being discussed with the European Commission, the member states and the European investment bank. The package would provide provisions to sustain investments in R&D and new product programs.

Market incentives. Incentives such as a scrapping scheme for older vehicles represent an important mechanism to accelerate the uptake of more fuel-efficient technologies and renewing the car fleet on Europe’s roads. In the EU15, cars older than 8 years represent 36% of the existing fleet. Their replacement with new cars would result in CO₂ savings of 20 megatonnes per year, or 4.5% of total passenger car emissions. There would also be a significant reduction on emissions of nitrogen oxide and particulate matter.

Reciprocal trade. The industry says that EU trade policy should strive for a further trade liberalization on both multilateral and bilateral level. Each bilateral free trade agreement (FTA) should ensure the European industry full reciprocity and a real opportunity and fair market access on both sides of the negotiating table.

The European industry’s particular concern in this area is the envisaged conditions for an FTA with South Korea. The industry said that EU trade barriers might be eliminated to further Korean exports, without offering the European auto industry any kind of reciprocity.

CARS 21 was initiated in 2005 by the European Commission with the goal of strengthening the European automotive industry through making recommendations on the underlying regulatory framework. CARS 21 (Competitive Automotive Regulatory System for the 21st Century) involves national governments, the European Commission, the European Parliament, the automotive industry, environmentalists, trade unions, suppliers, consumers and the oil industry.

The European auto industry trade association ACEA is an active partner in CARS21. The five CEOs present in the Brussels meeting were: Christian Streiff (ACEA President, PSA Peugeot Citroën), Dieter Zetsche (Daimler), Sergio Marchionne (FIAT), Carl-Peter Forster (GM Europe) and Leif Johansson (Volvo).

The ACEA members are BMW Group, DAF Trucks, Daimler, FIAT, Ford of Europe, General Motors Europe, Jaguar Land Rover, MAN Nutzfahrzeuge, Porsche, PSA Peugeot Citroën, Renault, Scania, Toyota Motor Europe, Volkswagen and Volvo.

Resources

• CARS 21 Mid-Term Review