Environment and Climate

CO₂ regulation of passenger cars and light commercial vehicles in Europe

Official CO₂ limits for passenger cars and light commercial vehicles have been in force for a number of years. EU Regulation EC 443/2009 set an official CO₂ limit for passenger vehicles of 130 g/km CO₂ for 2012, phased-in gradually by 2015.

Framing CO₂ regulation for the period after 2020

The ideal solution for regulation after 2020 however is still awaiting discovery. What is clear is that before the “old regime” is simply and precipitately extrapolated in a straight line and significantly tougher emission limits defined, the technical and economic feasibility needs to be looked at and the corresponding calculations of the estimated consequences made.

In any event, European CO₂ regulation for the period after 2020 must be reconsidered from first principles in order to maintain industry’s indispensable productive capacity. “More of the same” would be accompanied by considerable climate policy weaknesses and even greater economic risks.

  • The existing regulations are aimed entirely at new vehicle efficiency and fail to consider either the passenger car fleet (see Figure 5) or customers’ mileage or driving style.
  • Excessive targets are counterproductive because technologically- driven higher new car prices would negatively impact demand: the necessary renewal of the vehicle fleet that climate policy requires would also be delayed, new car purchases would be deferred, people will simply continue to drive their old car – with a significantly worse CO₂ balance.
  • The 2020 target is already incapable of being achieved with conventional technology alone – the conventional combustion engine. Electro-mobility needs to be ramped up. But that takes time. As regards market and cost developments, and infrastructure as well, electro-mobility still poses numerous questions that currently defy adequate answers. To that extent, the EU’s purely supply-oriented policy on CO₂ limits, without regard to the demand side, is one-sided and unbalanced.
  • A politically enforced, premature end to the combustion engine would deny industry the financial wherewithal for investing in the transition to alternative drive systems. Such a policy would not be technologically neutral and would massively limit the diverse manufacturer portfolio.
  • Last but not least, the overarching European goal of increasing industry’s share of GDP to 20 percent must not be thwarted by climate policy overregulation.

In view of these obvious weaknesses and risks, the automotive industry suggests reforming the existing regulation methodology and complementing it with an overall strategy. A linear extrapolation of the regulation must be avoided at all costs.

  • In addition to new vehicles, other factors influencing road traffic CO₂ emissions should also be taken into consideration. These include the car’s mileage and service life or the CO₂ content of the energy source (fuels, electricity). The vehicle fleet also needs to play a bigger role. To that end, the inclusion of vehicle fuels in emissions trading (ETS) could also supplement fleet regulation.
  • Because of the imponderables surrounding electro-mobility and the necessary discussion on reform, new CO₂ targets for the period after 2020 should not be set prior to 2017.
  • To ensure that the market for electric vehicles takes off, e-cars must continue to be credited with zero grams of CO₂ in the regulations. An active, demand-oriented policy by the member states is also required to support the new technology (charging infrastructure, etc.).
  • Moreover, the next regulatory period – in line with other climate and energy policy targets – should be geared to 2030 instead of 2025.
Dr. Martin Koers
Dr. Martin Koers Head of Department Economic and climate protection policy

Tel: +49 30 897842-350 Fax: +49 30 897842-600
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