Carmakers Get a Road Map for Tougher EU Limits on Carbon Dioxide

(Bloomberg) -- European Union negotiators reached agreement on tighter caps on carbon dioxide from cars in a bid to spur the development of clean vehicles.

Representatives of EU governments and the European Parliament fixed a 37.5 percent CO2-reduction target for 2030 compared with the 2021 limit.

The deal on Monday in Brussels marks a compromise after the 28-nation Parliament in early October demanded an average 40 percent CO2 cut by autos in 2030 compared with 2021 and EU governments called later the same month for a 35 percent reduction over the period. The accord also includes an interim CO2-cut target for 2025.

“This is an important signal in our fight against climate change,” Environment Minister Elisabeth Koestinger of Austria, current holder of the EU’s rotating presidency, said in a statement after a nine-and-a-half-hour meeting that marked the third attempt in as many weeks to achieve a breakthrough. “We had tough and intense negotiations.”

Europe is showing greater resolve to clean up road transport amid heightened warnings about the catastrophic environmental impact of climate change and about the economic risks of losing out to the likes of China in the technological transition to low-emission vehicles.

Greenhouse Gases

About 15 million autos are sold each year in the EU, with cars accounting for more than a tenth of the bloc’s releases of CO2, the main greenhouse gas blamed for rising global temperatures. Electric vehicles in Europe have a market share of around 1.5 percent.

Like the targets for 2030 sought initially by the EU Parliament and national governments, the goal settled on during the deliberations on Monday is more ambitious than a 30 percent reduction proposed over the period by the European Commission, the bloc’s regulatory arm, in draft legislation last year.

Car-industry groups have warned that tightening the commission proposal would threaten automotive jobs and consumer choice in Europe. The EU’s current average caps on CO2 from cars are 130 grams a kilometer set for 2015 and 95 grams fixed for 2021.

The negotiated deal “demands too much,” Bernhard Mattes, head of German auto-industry group VDA, said in an emailed statement on Monday. “Nobody knows today how the agreed limits can be achieved in the given time.”

The European Automobile Manufacturers’ Association struck a similar note, expressing “serious concerns” about the 2030 target because “delivering a 37.5 percent CO2 reduction might sound plausible but is totally unrealistic based on where we stand.”

At their Brussels meeting, the EU negotiators also fixed an interim CO2-cut target for autos of 15 percent for 2025 -- in line with what member governments and the commission recommended initially and lower than a 20 percent reduction demanded by the Parliament two months ago.

In addition, the negotiators broadly upheld a system proposed by the commission of additional incentives for clean-car output.

Transport & Environment, which campaigns for sustainable mobility, hailed the accord while saying it still falls short of what’s needed for the EU to meet its objectives under the landmark United Nations pact reached in Paris in 2015 to fight global warming.

“Europe is shifting up a gear in the race to produce zero-emission cars,” Greg Archer, T&E’s clean-vehicles director, said in a statement. “The new law means by 2030 around a third of new cars will be electric or hydrogen-powered. That’s progress, but it’s not fast enough to hit our climate goals.”

The agreement still needs the approval of member-country governments and the full EU Parliament -- steps that are usually formalities.

©2018 Bloomberg L.P.