EU to compromise on auto emissions

BRUSSELS: The European Commission will unveil a compromise proposal Wednesday on limiting emissions from new passenger cars in a battle that has pitted Europe's ambitious environmental goals against some of the world's biggest car makers.

After fierce lobbying by European automakers, the 27-member EU executive is expected to endorse a watered- down blueprint to impose a mandatory limit on carbon dioxide emissions from new cars to an average of 130 grams per kilometer by 2012. The initial proposal, which the EU was forced to shelve last week, set a target of 120 grams.

Environmentalists criticized the EU for surrendering to the auto industry, saying the plan would do little to dissuade European car makers from continuing to produce gas-guzzlers.

But the powerful auto lobby, concerned that the measure risked denting profits and spurring factory closures across the Continent, is girding for a further fight on the initiative, which forms the basis for upcoming EU legislation that must be approved by EU member states.

Under the proposal, the commission will accept the industry's demand for an approach that reduces pressure on manufacturers to alter their car designs.

Instead, carmakers will be encouraged to find other ways to reduce emissions, such using more biofuels, improving tires and gear boxes, educating motorists about fuel-efficient driving and requiring roads to be smoother.

Sigrid de Vries, a spokeswoman of the European Automobile Manufacturers Association, which represents 13 automakers, including BMW, Volkswagon and Ford, said the compromise still placed an expensive burden on the automotive industry.

"The risk is that it will lead to a loss of jobs and production in Europe," she said, "while making cars more expensive for consumers."

The auto industry employs six million people in Europe, the bulk of them in big EU countries like Germany, France, Italy and Spain.

Sergio Marchionne, the chairman of Fiat, warned the European Commission president, José Manuel Barroso, that the previously proposed 120 gram emissions cap would shift thousands of jobs overseas.

He argued that the commission's own consultants had calculated that the cap would add €3,650, or $4,800, to the average retail price of a new car.

Some auto executives say they also fear that a mandatory EU cap on carbon-dioxide emissions would unfairly favor companies like Renault and Fiat, which produce smaller cars.

"This is a business war in Europe," the chief executive of Porsche, Wendelin Wiedeking, said at a recent meeting of shareholders in Stuttgart. "It's the French and Italians up against the Germans."

Environmental groups sought to rein in the automakers' campaign, arguing that cars accounted for more than one 10th of the EU's emissions of carbon dioxide.

They said many European car companies were intent on producing gas-guzzling cars, even though Japanese, French and Italian automakers had shown that producing more fuel-efficient cars was a viable option.

The Toyota Prius hybrid, for example, emits 104 grams of carbon dioxide emissions per kilometer, while the Citroen C1 produces 109 grams.

"This proposal is a pathetic caving in to industry — the car makers are choosing to market big gas guzzlers" said Dudley Curtis, spokesman for Transport & Environment, an environmental group.

"The European Commission's target has been watered down several times and in light of the climate change threat, this is very, very disappointing."

Barbara Helfferich, spokeswoman for the European Commission's environmental minister, said she was confident the EU would still be able to reach its Kyoto Protocol target, which aims to reduce greenhouse gas emissions by 8 percent below 1990 levels by 2012.

EU officials who have seen the proposal said the environmental commissioner, Stavros Dimas, had wanted to introduce far more ambitious mandatory carbon-dioxide limits for cars.

But officials, who asked not to be named because they were not authorized to speak publicly, said he was blocked by a group of commissioners led by industry commissioner Gunter Verheugen, who wanted the burden to be shared by car makers and equipment makers.

Even Chancellor Angela Merkel of Germany, holder of the EU's rotating presidency, waded into the debate, threatening last week to block the commission proposal and calling for different limits to be set for different types of cars.

The battle over the car industry's responsibility to lower emissions comes just weeks after the EU unveiled a "low- carbon" strategy to fight global warming by reducing its reliance on imported oil and natural gas and by promoting the use of renewable energy sources.

In an effort to promote the commission's climate-friendly agenda, EU officials said Dimas indicated recently that he was considering trading his large luxury model Mercedes for a more fuel- efficient Toyota Lexus.