Carmakers ‘inflate cost of going green’

By Anna McLauchlin

Date: 12/05/05

Estimates by the car industry of how much it will cost to meet planned 2012 carbon dioxide (CO2) emissions limits are likely to have been significantly exaggerated by the car industry, according to a study commissioned by the EU executive.

A source close to the study, which was submitted to the European Commission some months ago, told European Voice that it found the cost of reducing CO2 emissions in new cars to 120 grammes per kilometre were "less than 50% of the car industry's estimate of €4,000 per car".

The industry based its estimate on findings from a report carried out by global consultant Arthur D. Little and have used it to argue that the target is impractical.

The 120g/km target is a long-term goal set by the Commission in its drive for cleaner cars. In 1998 it signed a voluntary agreement with European, Japanese and Korean carmakers to limit output from all new cars to 140g/km by 2008. The Commission is supposed to produce a strategy to reduce output to the 2012 target by July 2005.

A Commission source said that preliminary indications gave the "strong impression that the industry's figures are exaggerated" but would not confirm the study's findings which he said were part of wider research into the issue.

The Commission has asked for minor corrections to be made to the study before it can be published.

Part of the reason for its unwillingness to confirm findings could be that the car industry is already likely to miss the 140g/km target by 2008.

A Commission report, which will be published shortly, is expected to find that last year the industry reduced carbon emissions by only 1.8% to an average of 160g/km.

A Commission source said that the industry was finding the target "quite a challenge".

Consumer appetite has increasingly veered towards larger, more comfortable vehicles and carmakers have catered to demand.

A spokesman for the UK Society of Motor Manufacturers and Traders said that compliance with other EU rules, such as fitting additional features for pedestrian protection and meeting recycling targets in the EU's end of life vehicles directive, also added weight to cars and make it difficult to reduce emissions.

"We are improving, but there are some obstacles out there," he said. The UK average new car CO2 output is 170g/km.

According to environment and transport campaigners T&E, "current trends suggest that ACEA will at best achieve 80% of the gap between 1995 emissions and the 2008 target". T&E estimates that by 2008-09, new registrations will emit around 150g/km.

If carmakers cannot meet their current commitments on CO2, experts say that it could be embarrassing for the Commission to introduce an even tougher goal for 2012. Under the terms of the 1995 agreement, the Commission can legislate if industry misses the 140g/km target by a "wide mark".

Commission sources would not confirm how wide a mark would spark regulatory action, but observers will be watching closely for any indications when, and if, the Commission unveils its 2012 strategy.

Estimates by the car industry of how much it will cost to meet planned 2012 carbon dioxide (CO2) emissions limits were likely to have been significantly exaggerated by the car industry, according to a study commissioned by the European Commission.