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EU Car CO2 Proposals Well-Tuned: Car Parts Chief

Date: 15-Jun-12
Country: BELGIUM
Author: Barbara Lewis

European Commission proposals to enforce tighter CO2 standards for new cars strike the right balance between ambition and cost, the head of European car part suppliers' association said, arguing against tougher goals for now.

Jean-Marc Gales, CEO of CLEPA, the European Association of Automotive Suppliers, said the plans for a binding 2020 target to limit emissions to 95 grams per kilometer would add around 1,000 euros ($1,200) to the price of a car and that would be quickly paid off through savings in fuel consumption.

"We believe the 95 gram target can be reached with available technologies by 2020 and 147 grams (for vans) is quite feasible," Gales told Reuters in an interview.

CLEPA represents more than 3,000 companies. Its members include 90 of the most prominent suppliers of car parts, such as Thyssenkrupp and Mitsubishi Electric.

Asked whether an 80 gram goal, as favored by environmental campaigners, would also be possible with existing technology, he said it was, but it would be too expensive for now.

"That is most certainly true, but at what cost? What we always need to bear in mind is that this technology needs to be bought by the consumer," Gales said.

"Ninety-five grams is the optimum level for ambition and payback for consumer over a couple of years."

The Commission is expected to publish next month a proposal to make binding a 2020 goal to lower CO2 emissions to an average of 95 grams per kilometer (g/km), compared with an existing binding target of 130 g/km.

It is also expected to propose enforcing a 2020 147 g/km target for vans.

FUEL SAVINGS

For the average motorist, fuel savings of around 500 euros per year would stem from the 95 g/km goal, based on a driving distance of 20,000 km (12,430 miles) per year and a fuel cost of 1.4 euros per liter, according to data cited by Commission officials.

But some industry representatives have said tougher binding standards would be extremely challenging for an EU industry struggling against economic slowdown and over-capacity.

Gales sided with those who say higher fuel efficiency can help the EU industry retain a technological edge, as international rivals catch up with environmental standards.

Research has found fuel efficiency can create high-level jobs, such as engineering, in a mature industry.

A U.S. study entitled More Jobs Per Gallon found that a 5 percent annual improvement in fuel efficiency standards in the United States would create 603,000 net additional jobs by 2030, of which 54,000 would be in the auto sector.

"You know that in a mature industry, to get more competitive, you have to spend more. We say these regulations help us to stay competitive, but we are asking the Commission for more money," Gales said.

For now, CLEPA estimates part suppliers invest about 15 billion euros in research and development, which is approximately 5 percent of turnover.

After the 2020 goal, the Commission's draft text flags the possibility of 2025 targets. Gales said CLEPA was consulting its members on that.

"By the end of 2012, we will have an indicative target (for 2025)," he said.

It is also still formulating a view on the implications of a statement from the World Health Organization that diesel engine exhaust fumes can cause cancer.

So far CLEPA has supported diesel engines as more efficient than petrol and helpful in meeting the 95 g/km target.

The Commission, however, has proposed changes to fuel taxation that would remove what it sees as an unfair tax advantage and if passed, would be expected to curb a rise in diesel use.

"Diesel helps to achieve the 95 grams. Our position was we should keep the current tax," Gales said. CLEPA would now have to assess the cancer link, he added.

The organization is also poised for a future change to how car emissions are tested, but until then, is working with the existing system, often criticized for not providing an accurate assessment of emissions over a car's lifetime.

"The testing cycle that we have right now is what it is and we are basing our targets on the existing cycle. Every test cycle has its limits," Gales said. "Let's not get into a discussion of the new testing cycle right now."

(Editing by Marguerita Choy and James Jukwey)

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