Frost & Sullivan Projects That About 80% of European Vehicle Sales Will Be in the <150 g/km CO2 Band by 2015; EVs as a Strategy of Premium Automakers
A new report from Frost & Sullivan, Implementation Roadmap of CO2 Tax Banding in European Countries and Impact Analysis on Powertrain and Green Technology Adoption, finds that about 80% of the European vehicle sales is expected to be in the less than 150 g/km CO2 emission band by 2015. The countries covered in this research service are Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom.
European automakers are striving to comply with EU CO2 norms (average fleet emissions less than 130 g/km by 2015) to avoid penalties. (As a point of comparison, the US EPA’s proposed national CO2 emissions standards for light-duty vehicles under section 202 (a) of the Clean Air Act would require these vehicles to meet an estimated combined average emissions level of 250 grams/mile of CO2—155.26 g/km—in model year 2016. Earlier post.) Key elements of the CO2 regulations for passenger cars include:
Total reduction in average CO2 emissions from new cars to 120 g/km, with 10g/km to come from non-vehicle technologies and measures, such as a greater penetration of biofuels.
Staggered implementation: 65% to comply with requirements in 2012; 75% in 2013; 80% in 2014 and 100% in 2015.
Eco-innovations will count for up to 7 grams of manufacturers’ fleet targets.
Super-credits are awarded for vehicles emitting less than 50 g CO2/km.
Penalties will be imposed on a sliding scale; manufacturers exceeding their target by more than 3 g/km will pay €95 (US$137) per excess gram per vehicle. Smaller charges between €5 and €25 for excesses of 1 – 3 g/km.
- Provisions for niche manufacturers (10,000 to 300,000 units) to achieve fleet average reduction of 25%.
In 2014, any weight increase in new cars will be studied. Following review, CO2 targets may be adjusted in 2016, to be reviewed every three years.
Average new car CO2 emissions should fall to 95 g/km in 2020, following a thorough assessment of this target’s expected overall impact.
The European Automobile Manufacturers’s Association (ACEA) says that its members have introduced more than 50 new technologies in their vehicles over the last 10 years to reduce CO2. ACEA says that the industry spends €20 billion (US$28.8 billion) annually—4% of its turnover—on R&D with much of this spending contributes to reducing the environmental impact of cars, including CO2 emissions.
By 2015, the average car in Europe will be 5 per cent lighter, with 30 per cent lower CO2 emissions. Downsizing, gasoline direct injection (GDI), and start-stop will be the key technologies helping original equipment manufacturers (OEMs) achieve emission targets by 2015.
—Frost & Sullivan Program Manager Vigneshwaran Chandran
About 8-10 million cars are expected to be in the less than 120g/km CO2 emission band in Europe by 2015—a significantly attractive market opportunity for both volume and premium manufacturers.
While VMs invest heavily in the development of new low-CO2 models and engine variants, it is challenging to pass on these costs on to the customer, risking the OEMs’ profitability, the report says.
Offsetting the high development costs for green technologies and time for returns-on-investment on certain expensive developments such as gasoline direct injection and hybridization will be a key commercial challenge for automakers.
—Frost & Sullivan analyst Hariher Balasubramanian
Subsequently, automakers will likely employ different strategies for emission reduction, with mass manufacturers adopting moderate downsizing and technologies like variable valve train (VVT) and GDI. On the other hand, premium automakers will invest significantly on aggressive engine downsizing by more than 20%, combined with full hybridization, according to the analysis.
Premium manufacturers such as Daimler and BMW are likely to use a combination of electric vehicles, hybridization, and downsizing to achieve their 2015 CO2 emission target of 130 g/km, while volume manufacturers will use a mix of green technologies such as GDI, VVT and start-stop systems.
Implementation Roadmap of CO2 Tax Banding in European Countries and Impact Analysis on Powertrain and Green Technology Adoption is part of the Automotive & Transportation Growth Partnership Services program, which also includes research in the following markets: 360 Degree Analysis of the European Powertrain Market for Passenger Vehicles, Executive Analysis of the European Light Commercial Vehicles Powertrain Market, and Global Hybrid and Electric Vehicles Database.