A European Commission draft proposal tightening allowable average fleet CO2 emissions to 95 grams per kilometer by 2020 for the 27-country European Union – and said to be “likely to divide the auto industry” – is currently being considered prior to formal public announcement next month.
The advance preview of the legislation was via Reuters in Brussels, and the news agency said the provisional, non-binding standards compare to binding CO2 targets already in place of 130 g/km set in 2009, and for which automakers are on target to meet in 2015.
Once put in place, fines for automakers that fail to make the cut to 95 g/km would be what they are for non-compliance with present standards – 95 euros for each gram of CO2 per vehicle.
Some in the industry are saying however that the raised hurdle would be too high to practically leap over. On the other hand, advocates have said the stricter standard would boost competitiveness for the presently challenged European auto industry as non-EU rivals strive to catch up with their environmental standards.
Further, those in favor say the 95 g/km standard would mean fuel savings amounting to around 500 euros per year, and would thus more than compensate for costs associated with bringing cleaner machines to market by 2020. This estimate was based on fuel costs factored at 1.4 euros per liter, and annual driving distance of 20,000 km per vehicle.
In all, estimates are the new law would reduce fuel consumption by 25 percent in cars and vans amounting to an aggregate savings of $31.2 billion (25 billion euros) per year.
While the U.S. focuses more on increases fleet average miles per gallon, new Corporate Average Fuel Economy rules this year do also call for emissions reductions, and with added pressure from strict standards in Europe, U.S. automakers developing cars for those markets will need to comply as well. The Euro legislation thus stands to increase pressure on global automakers to seek alternative, less emissions-intensive technology, including electrification of one sort or another.
The European Commission says some remediation is necessary to cut CO2, and cites its continued drive cut levels based on the observation that road transportation increased emissions by 26 percent between 1990-2008, making it one of the few sectors that’s still rapidly rising.
The new rules, once they’re made fully public, will still have to go through a lengthy approval process before they become actually enforceable.