EU poised to propose 30% CO2 emissions cut for cars, vans

November, 7, 2017 - The European Union is poised to propose a 30% cut in carbon-dioxide emissions from cars and vans in the decade through 2030, an EU official said.

The move sets the stage for tough negotiations with auto makers fighting for lower targets and environmentalists pushing for greater reductions.

A final decision is due Wednesday after the EU’s executive arm, the European Commission, holds its weekly cabinet meeting.

The proposal is expected to include a midterm target of 15% CO2 emissions reductions by 2025, an effort to push European auto makers to quickly shift their production, the EU official said. Other people familiar with the deliberations confirmed elements of the proposal.

To promote the transition toward zero-emission vehicles, the EU is also primed to propose a benchmark for zero-emission electric vehicles and low-emission vehicles, such as plug-in hybrids, that would allow auto makers to count any additional production as carbon credits, the official said.

A commission spokeswoman declined to comment on the proposal, saying the EU executive’s top officials would finalize their decision Wednesday.

The EU is tightening its CO2 standards for cars and vans as part of the bloc’s push to meet its commitments under the Paris Agreement on climate change to reduce greenhouse gas emissions by 40% by 2030.

Brussels’s new regulatory regime also follows a 2015 diesel-emissions cheating scandal that tainted the reputation of European auto makers—with Volkswagen AG facing settlements of potentially more than $20 billion in the U.S.

“Europe’s car industry must regain the trust of its consumers,” European Climate Action and Energy Commissioner Miguel Arias Cañete said Tuesday at the European Parliament, without unveiling the EU executive’s final proposal. “These targets will be ambitious, cost-effective and enforceable.”

EU officials for the past month have been debating emissions-reduction targets, which were initially tabled at 25% to 35% for cars and 30% to 40% for vans.

Some EU lawmakers, as well as environmental and consumer groups, already say the commission’s proposal fails to deliver on the bloc’s climate goals and Paris Accord pledges.

One sticking point for critics who demanded an electric vehicle quotas is the benchmark scheme.

Under the proposal that is shaping up, an auto maker that meets zero- and low-emission vehicle manufacturing levels determined by the EU would be allowed to use any additional production to scale down its overall emission reduction target, according to the EU official. Those benchmarks are expected to be 15% for 2025 and 30% for 2030, with low-emission vehicles classified as releasing less than 50 grams of CO2 per kilometer.

“A flexibility regime…will lead to the perverse effect,” said Claude Turmes, an EU lawmaker with the Green Party from Luxembourg.

By opting for incentives instead of mandatory quotas, the proposal risks subsidizing high-polluting vehicles with zero-emission autos, Mr. Turmes said at a Monday briefing. He called for a 50% electric-vehicle production requirement by 2025.

On the other end of the spectrum is the Brussels-based European Automobile Manufacturers’ Association, or ACEA, which had been lobbying for a 20% cut to car emissions from 2021 through 2030.

“This is a steep reduction,” ACEA President and Daimler AG Chief Executive Dieter Zetsche said mid-September. “It’s also in line with what is expected of other industry sectors.”

European car companies say they are ahead of global peers, with a 26% emissions reduction in the decade through 2016. An ACEA spokeswoman declined to comment on the EU deliberations.

Source: The Wall Street Journal