Car industry drifting on CO2 targets

The European Commission remains bullish that car makers can deliver on their voluntary agreement to reduce CO2 emissions. But 2002 saw the slowest progress since 1995 despite a significant shift to more efficient diesel vehicles - and the car industry is digging its heels in over further, more demanding targets.

In 1998, European car manufacturers' association ACEA agreed to reduce the average CO2 emissions from new cars to 140g/km by 2008. A year later Japanese and Korean counterparts, JAMA and KAMA, agreed to reduce emissions to this level by 2009 (ENDS Report 336, pp 53-54 ). ACEA holds over 84% of the European car market, while JAMA and KAMA have 11% and 2%, respectively.

The latest figures from the European Commission show that in 2002 the industry's annual rate of progress stalled, with the smallest improvement since 1995.1 New cars sold in the EU had average emissions of 166g/km - an improvement of just 1g/km on the previous year, considerably less than the 1.5% average rate of improvement over the preceding six years.

The slowdown is particularly marked for ACEA. The organisation's own figures suggest that emissions fell from 165g/km in 2001 to just 163g/km in 2002. However, figures from Member States - submitted for the first time - suggest that new car emissions were stuck at 165g/km (see table).

Despite the poor performance in 2002, the Commission maintains that ACEA and JAMA and are still on track to meet their commitments. Both associations have already met indicative targets for 2003 and 2004 respectively.

In contrast, the Commission says that KAMA's progress is "still unsatisfactory". Although Korean manufacturers have been catching up slightly in the last 2 years, the Commission warns that there is a "real risk" that KAMA will not meet its 165-170g/km intermediate target set for 2004. In 2002, KAMA achieved average emissions of 183 g/km.

The Commission warns that "additional and significant efforts will be necessary" if KAMA is to meet its intermediate target. Failure to meet this target could prompt the Commission to introduce legislative proposals - although Brussels appears to be backing away from implementing this long-standing threat.

Delivery of the commitments for 2008/9 are far from being in the bag. ACEA needs to improve by around 2.5% every year - but since 1995 it has only managed annual improvements of about 1.6%. Similarly, JAMA and KAMA need to deliver annual improvements of 2.8% and 3.4% - much more than the annual 1.6% and 1%, respectively, which they have managed in recent years.

The Commission maintains that "it was anticipated from the beginning that the average reduction rate would be higher in the later years" of the agreements - presumably because new technologies such as hybrids take time to bring to market (ENDS Report 328, p 33 ).

So far, however, much of the progress has come from a switch to diesel - arguably a relatively easy one-off gain. Diesel cars' market share has increased from 22% in 1995 to almost 41% in 2002, with a record annual increase between 2001 and 2002. The Commission's report gives no assessment of how much this "dieselisation" of the fleet has contributed to the reported emissions reduction.

Moreover, it remains deeply unclear how legitimate it is for car manufacturers to claim the benefit of this shift to diesel. The Commission ducks the issue - merely restating its position that the targets are not supposed to be met "by a simple increase in the diesel share only" but rather by "technological developments and market changes linked to these developments."

The intention was that other measures - such as car labelling and fiscal incentives at EU and Member State level - were to deliver a more demanding EU target of reducing average emissions to 120g/km by 2012. However, the shift to diesel may have been partly driven by fiscal incentives - in which case manufacturers should not be able to claim it towards their own targets.

The report sheds little light on this key uncertainty at the heart of EU policy. However, it reveals that the Commission is now reviewing whether the emission reductions to date were due to technical improvements or changes in consumer behaviour.

One positive note is that the number of cars meeting the 2012 target has more than doubled for the second year running. During 2002 ACEA and JAMA sold over 620,000 cars emitting 120g/km or less - although KAMA had not yet introduced any qualifying models.

The debate is now moving on to the case for a successor agreement aimed at delivering further emission reductions. The Commission has started informal consultation with ACEA and JAMA on the scope for technical improvements beyond 2008/9 to help reach the 2012 target - but ACEA is already claiming that this is not technically or economically achievable (ENDS Report 348, p 41 ).

  • Vans: The Commission is also starting to address emissions from vans. These account 13% of road transport's CO2 emissions and the contribution is set to rise in both absolute and relative terms in the coming decade.

    The Commission cites studies which show that average CO2 emissions from vans can be cut by 23% by 2010 and 28% by 2015, at a cost of about €50 per tonne.

    The major stumbling block to progress is the lack of a reliable data base for van emissions. In 2001, Commission proposed a Directive stipulating standardised rules for measuring emissions, but the other EU institutions have yet to endorse it.

    The Commission stressed that detailed proposals for tackling van emissions will not emerge before more reliable data is available, but revealed that it is considering emissions monitoring, labelling and unspecified "emission reduction measures". It is unclear whether it intends to establish voluntary agreements similar to those for cars.

  • Air conditioning: The Commission is also looking at vehicle air conditioning - which is not covered by the voluntary agreements on cars.

    At present, air conditioning increases CO2 emissions by 3-8%, but the Commission believes that this could potentially be halved. Its first action will be to harmonise test procedures.

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