17 December 2008

The European Parliament has voted to adopt a compromise deal with the European Council regarding future targets on CO2 emissions from cars.

The new legislation will set binding emissions targets to ensure that emissions from the new car fleet are reduced to an average of 130 g CO2/km. A further emission reduction of 10 g/km—to meet the EU CO2 emission target of 120 g/km—will be provided by complimentary measures, such as the use of biofuels. CO2 emissions from today’s new car fleet are at about 160 g/km.

Compared to the European Commission proposal, the agreed text delays the implementation of the CO2 limits (proposed to be implemented in 2012) by introducing a phase-in period from 2012 to 2015. Manufacturers will be given interim targets ensuring an average CO2 emission limit of 65% of their fleets in January 2012, 75% in January 2013, 80% in January 2014 and 100% from 2015.

A long-term CO2 target was also adopted of 95 g CO2/km starting in 2020.

Manufacturers who miss the average CO2 targets are subject to fines. From 2012 to 2018, the fines are €5 for the first gram of CO2; €15 for the second gram; €25 for the third gram; €95 from the fourth gram onwards. From 2019, manufacturers will pay €95 for each gram exceeding the target.

Under the compromise deal, manufacturers may apply for “eco-innovation” credits for innovative CO2 reducing technologies, such as energy efficient lights, which are currently not included in the normal test cycle. The total contribution of eco-innovation credits is limited to 7 g CO2/km in each manufacturer’s average specific target.

As a complementary CO2 reduction measure, the adopted text includes provisions for amending the fuel quality directive (Directive 98/70/EC). The amended directive will place an obligation on suppliers to reduce greenhouse gases from the entire fuel production chain by 6% by 2020. A review in 2012 will consider increasing the greenhouse gas reduction target to 10% by 2020 through the inclusion of international projects, carbon capture and storage as well as electricity for cars.

The adopted text is part of the EU’s effort to reduce CO2 emissions by 20% by 2020.

Source: EU Parliament