EU: Tajani Backs Away From 2025 Fuel Efficiency Fight

(EurActiv) — A recent moratorium on new legislation in the automobile sector announced by the European Industry Commissioner Antonio Tajani is being quietly shelved, EurActiv has learned.

In a declaration of support to an automobile industry bitterly divided over new carbon dioxide standards for 2025, Tajani recently said that he had instructed his directorate “to implement a regulatory moratorium to avoid new costs and limit relocations”.

However, his spokesman Carlo Corazza told EurActiv that the moratorium would not apply to the EU’s proposed 2020 target of 95 grams of CO2 per kilometre, or to any other targets that might be brought forward for 2025.

“This legislation is under the competence of Commissioner [Connie] Hedegaard of Climate Action,” Corazza told EurActiv.

“It is a political debate and everyone has his position, so you can guess that the position of the Industry Commissioner is not always identical to the one for Climate Action and this is normal,” he said.

Asked what exactly the new moratorium would cover, Corazza replied, “nothing, for the moment.”

The European Union has already set a target of 130g CO2 per km for 2015, which Volkswagen earlier this month said it would overshoot by 10g, having previously argued against it.

Later this year, proposals are expected to be unveiled for a cap on CO2 emissions of 95g per km for cars, and 147g per km for vans, by 2020.

But it is the question of targets for 2025 which has set auto lobbyists sharpening their pencils and aiming them at each other.

Bitter dispute

A bitter dispute is currently raging within the European car industry over how many grams of CO2 manufacturers should be allowed to emit in that milestone year, pitting car suppliers against manufacturers.

The European Association of Automotive Suppliers (CLEPA), which represents more than 3,000 companies in the auto-industry supply chain, supports the EU’s 2020 target and argues for an 80g target in 2025.

“We must have the longest possible lead-in time and certainty in our investments,” Lars Holmqvist, CLEPA’s chief executive told EurActiv. “The earlier we know, the better it is.”

But another car interest group, the European Automobile Manufacturers Association (ACEA), which represents the big car companies, wants no talk of 2025 goals – and describes the 2020 ones as “extremely challenging”.

“It requires breakthroughs in technology which are very different from the 120g and 130g targets,” said ACEA spokeswoman Sigrid de Vries, calling for more EU focus on market incentives, alternative fuels and electric car charging points.

ACEA’s contention that a declining market, stringent regulation and high labour costs had brought Europe’s auto industry to the edge of crisis was questioned by Holmqvist, who said that it was actually doing rather well.

Sergio Marchionne, ACEA’s president and Fiat chief executive, “took home a [compensation package] salary of $19 million in 2011,” Holmqvist noted wryly. “It is a lot of money if you’re in crisis.”

De Vries countered that CLEPA just supported stronger EU targets because “they are producers of the parts and components and would like to sell as many as they can.”

Global green car race

Underlining the debate is a sense that the EU could soon be falling behind its international competitors in a green car race it had been winning hands-down.

US President Obama’s restructuring of the US car industry in 2009 led to an emissions standard for cars equivalent to 70-80g/km by 2025.

On 21 March, environmental activists at Greenpeace sent European Commission President José Manuel Barroso a letter arguing that if Europe wanted to stay ahead of its competitors, “support for restructuring the automotive sector [must] be explicitly linked to reducing vehicle CO2 emissions and oil dependence.”

Holmqvist agreed. “If we relax our fuel efficiency standards in order to help some weak actors in the market, we would commit suicide, because no-one wants to pay for more fuel, to pollute unnecessarily or be dependent on insecure sources of energy,” he said.

But what the fuel efficiency standard should be is a thornier question.

Environmental groups say that studies show that 60g can be achieved by 2025 without any electrification, and a European Parliament proposal that 70g be used as a target is currently being assessed by the European Commission.

But all wings of the car industry are more cautious. While ACEA favour a “step by step” approach, Holmqvist said that the Commission could reduce emissions to 80 grams per km by 2025 mainly through greater hybridisation.

“But if you go any further than that, it would mean quite a big step in the direction of electrification,” he added.

“Vehicle technology won’t work magic on its own,” de Vries agreed. “You need an integrated framework for long term targets and a societal transformation.”