UPDATE 1-EU Commission announces plans for greener cars

Wed Jul 11, 2012 12:57pm EDT

* Campaigners say plan lacks ambition, criticise loopholes

* Communication on goals beyond 2020 expected this year

* Some in car sector say targets threaten fragile industry (Adds official release, comment)

By Barbara Lewis

BRUSSELS, July 11 (Reuters) - The European Commission published plans on Wednesday to tighten limits on how much carbon dioxide new cars can emit, drawing warnings that it could inflict damage on an already fragile automobile industry.

The proposals, which the commission says can shave billions of euros off the EU fuel bill and cut greenhouse gas emissions by millions of tonnes, retain much of the detail of a draft seen by Reuters last month.

However, after lobbying from the car industry, they introduce limited flexibility on how a binding 2020 target to limit CO2 to an average of 95 grams per kilometre (g/km) for cars and 147 g/km for vans should be implemented. The existing legislation sets a binding 2015 limit for cars of 130 g/km, with a target of 175 g/km for vans by 2017.

EU Climate Commissioner Connie Hedegaard told reporters that the proposed regulation was "fair and balanced" and that loopholes had been narrowed. Compared with existing regulation, all manufacturers would have to contribute the same relative effort to make their cars more efficient, she said.

"With our proposals, we are not only protecting the climate and saving consumers money, we are also boosting innovation and competitiveness in the European automotive industry. And we will create a substantial number of jobs as a result," she said.

The European Automobile Manufacturers' Association (ACEA)described the targets as "extremely challenging".

"This will increase manufacturing costs in Europe, creating a competitive disadvantage for the region and further slowing the renewal of the fleet," ACEA Secretary-General Ivan Hodac said in a statement.

Philippe Doublet, a vice-president at Renault, said there would be an additional manufacturing cost, but told a Brussels meeting on Tuesday that the 95 g/km limit for cars was achievable.

It is unclear how much of the additional manufacturing cost can be passed on to customers in the current climate without depressing car sales further. Campaigners have estimated the per-car cost at about 1,000 euros.

"MISSED OPPORTUNITY"

Monique Goyens, director general of the European consumer organisation BEUC, welcomed the proposals. "This is a double win," she told reporters. "You save fuel costs and you are able to contribute on the environmental front."

Environmental campaigners, meanwhile, said that the plans marked progress but lacked ambition. They argue that 80 g/km can be met with existing technology.

They also criticised the decision to retain a certain amount of "super credits", which enable car makers to offset gas-guzzling vehicles with extremely low-emitting vehicles. The use of super credits under the proposed new law is less, however, than under existing legislation.

Green member of the European Parliament Rebecca Harms said that the commission proposal was a missed opportunity.

"Not only has the commission failed to argue for more ambitious limits -- in spite of this being technically possible and in the interest of consumers -- it has also not sought to close some of the loopholes," she said in a statement.

A commission statement said that each new car would save its owner an average of about 340 euros ($420) a year in fuel costs and an estimated total of 2,904 to 3,836 euros over a car's lifetime (13 years).

Overall, consumers will save about 30 billion euros a year in fuel costs and it is estimated that the targets could increase EU gross domestic product by 12 billion euros a year.

They would also save 160 million tonnes of oil -- worth about 70 billion euros at today's prices -- and around 420 million tonnes of CO2 by 2030.

The proposal must now go through a long negotiation process between EU governments and the European Parliament before it can become law.

Lobbying is likely to continue. So far, it has focused on technical details that determine how much of the burden the makers of big, heavy cars, versus lighter vehicles, will carry to achieve the 95 g/km average.

Hedegaard said that under the current proposal all manufacturers would have to make the same relative effort to achieve the average of 95 g/km across the EU fleet.

There is more to come. Hedegaard said that the commission would start work on targets for after 2020, which could involve introducing new methodology. A commission position paper is expected this year. ($1 = 0.8160 euros) (Editing by David Goodman)

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