WIREDGOV

New car co2 targets will reduce emissions and cut motorists' running costs

DEPARTMENT FOR TRANSPORT News Release (109) issued by The Government News Network on 10 July 2008

Transport Secretary Ruth Kelly has today launched a consultation on European Commission proposals to introduce compulsory CO2 targets for new cars. This will reduce carbon emissions, make cars more fuel efficient and cut the running costs of new cars.

The proposed target of 130gCO2/km by 2012 as the fleet average for each car manufacturer across the EU for all new cars will not only be an important step forward in tackling climate change, it will also incentivise the use of technology that will improve the fuel efficiency of new cars.

The Government is also urging the EU to adopt a longer term target - 100gCO2/km by 2020. This would deliver a cut in CO2 emissions from new cars by an extra five million tonnes a year by 2020, in addition to the six million tonnes cut under EU proposals. It could also reduce the running costs for motorists buying new cars by about £500 a year by 2020, a particularly important consideration at a time of rising oil prices.

The Government also wants to avoid the regulation creating competitive imbalance between different types of car manufacturers. The Government therefore welcomes provisions in the EU proposals for setting different targets for manufacturers producing small numbers of cars. A provision in the regulation for niche manufacturers who produce a narrow range of cars is also being urged by the UK.

Ruth Kelly said:

"Tackling climate change is one of the single most important issues we face. Harmful road transport emissions continue to rise and it is important we act now to reduce them.

"That is why we support this move to introduce mandatory CO2 targets for new cars - and are taking the lead in urging the adoption of a tougher target from 2020. This has potential for being the biggest CO2 saving measure in transport.

"It will be good for the environment and for the motorist, as more fuel efficient cars could mean reduced running costs of about £500 for new car buyers.

"But we also want to ensure that it does not unfairly impact on car manufacturers, particularly those that produce niche vehicles or a small volume of vehicles.

"That is why we argued for provisions that ensure these manufacturers are not unfairly penalised, whilst still producing more efficient vehicles that have a less harmful impact on the environment."

The consultation formally closes on 3 October but those who wish to respond are urged to do so as soon as possible.

Notes to Editors

1. The CO2 voluntary agreements were negotiated between the car industry and the European Commission. They set an average target for new cars of 140g/km by 2008 for the European car industry and 2009 for the Korean and Japanese car industries, for their sales of new cars in the EU. This represented a 25% reduction from 1995 levels.

2. However it is clear that the agreements will not be met. Therefore, on 19 December 2007, the European Commission published its proposals for a regulation on the carbon dioxide (CO2) emissions of new cars.

3. This regulation aims to achieve a Europe-wide reduction in the average CO2 emissions of new cars by setting mandatory targets for individual car manufacturers.

4. The UK has been calling for an additional long term target of 100g/km by 2020 across the EU. This will help give industry more long term certainty and will also save 5 million tonnes of CO2 a year in the UK in 2020, in addition to the 6 million tonnes expected from the Commission's proposal.

5. More fuel efficient cars will mean lower running costs for drivers. Our analysis suggests that running costs may be reduced by around £500 a year by 2020 as a result of the longer term target that the UK is proposing.

6. The penalties for non-compliance with the EC's proposed target start at 20 Euros per car per gram of CO2 over the manufacturer's target in 2012, rising to 35 Euros per gram of CO2 in 2013, 60 Euros per gram of CO2 in 2014 and 95 Euros per gram of CO2 in 2015.

7. As well as a strong environmental outcome, the UK is keen that the regulation does not create unfair competitive distortions.

8. The European Commission has proposed that small volume manufacturers - those manufacturers that sell less than 10,000 cars a year - should be allowed to apply to the Commission for their own individual target, rather than their target set out in the legislation.

9. The UK would also like to add a provision to the regulation to ensure that niche manufacturers - those manufacturers that specialise in a narrow range of vehicle types - are not unfairly penalised. The UK proposal is that these manufacturers are allowed to choose a challenging target that will require CO2 reductions much greater than the industry average, but more commensurate with the level of targets given to their competitors.

10. The discussions on this regulation will continue at the EU level, between EU Member States and the European Parliament. The earliest the regulation can be formally agreed is probably December 2008, at the Environment Council under the French Presidency.

11. The UK is now seeking views from stakeholders on our analysis and negotiating position, to feed into key discussions in the autumn. The deadline for consultation is 3 October. However this is fast moving discussion and key decisions on certain aspects of the regulation may need to be taken before then. We would therefore encourage stakeholders to make their views know as early as possible.

12. Professor Julia King was commissioned by HM Treasury to undertake an independent review to examine the vehicle and fuel technologies which over the next 25 years could help to decarbonise road transport, particularly cars. The Review drew on expertise from across both industry, in the UK and internationally, and Government.

13. The report made a number of recommendations, one of which was that the Government should push for a target of 100g/km to be added to the new car CO2 regulation.

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