German Auto Industry Calls EU′s CO2 Diet Unworkable | Business | Economy and finance news from a German perspective | DW | 13.02.2007

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German Auto Industry Calls EU's CO2 Diet Unworkable

Germans are regarded as environmentally friendly, but they have a penchant for gas guzzling cars, leading some to say that putting the onus to reduce emission solely on the car industry is unfair.

Luxury cars and premium brands pollute more than the EU average

Luxury cars and premium brands pollute more than the EU average

When it comes to consumer loyalty in choosing a car brand, national passions run deep in Europe. All of the top 10 best-selling cars in Germany are produced by Volkswagen, Opel, BMW or Audi. The French also vastly prefer cars in their home market, and the Italians are loyal to their Fiats and Maseratis.

So last week when Porsche CEO Wendelin Wiedeking argued before the EU Commission that the new C02 emission target of 120 grams per kilometer (g/km) pitted beefy German cars against smaller French and Italian producers, Chancellor Angela Merkel pushed for a compromise.

The new EU-wide target for 2012 is now 130 g/km with the shortfall of 10 grams to be made up with the use of bio-fuels and other measures, but the EU has yet to spell out how such a target is to be achieved.

The only European automotive brand that presently meets the 130 g/km cap is Daimler-Chrysler's two-seater, city-mini Smart. Even Fiat and Citroen, which largely produce compacts and sub-compacts have current emission averages above that level.

"We don't want to become a nation of skinny minis, do we?" asked one commentator in the trade magazine Auto Bild. "We want to preserve a wide choice on the market. Who doesn't want cleaner air? But not at the expense of enjoying our cars."

Can one size fit all?

Merkel macht Wahlkampf auf der IAA

The fight against global warming is a cornerstone of Merkel's EU presidency

Merkel said CO2 caps should be tailored to different market segments, with higher targets set for vans, SUVs and luxury cars.

The present EU emissions average is 161 g/km, which is where mass-market producers such as Volkswagen and Opel stand. At the top end, the average Porsche emits 297 g/km, while Audi, Mercedes and BMW fall in the 180-190 g/km range, according to Ferdinand Dudenhöffer, director of the Center for Automotive Research in Gelsenkirchen.

A trading system is one way some EU experts said the 27-nation bloc's average pollution could be decreased.

"Porsche, for instance, could buy emission points from a low CO2 producer such as Smart to reach the 130 g/km target," Dudenhöffer said. "Under such a trading scheme, the list price of a Smart would go down 600 euros ($778), while premium brands, such as Audi, BMW and Mercedes would go up 1,500 euros to 2,000 euros. The Porsche would wind up on average costing 6,000 euros more."

German carmakers also tend to favor this option to a one size fits all rule they said are discriminatory.

Porsche will never meet EU's target

Porsche 911 Carrera Coupe

Porsche said it won't be able to meet EU standards -- ever

"Porsche cannot reach 130 g/km -- not now, not ever, but our sports cars and SUVs are among the best in their category for emission standards," said Porsche AG spokesman Albrecht Bamler.

According to a spokeswoman for the flagship Mercedes division of Daimler Chrysler, a single standard for all automakers could leave consumers with fewer choices, by pricing certain sports cars or sedans out of the market.

"There is much that can be done technologically to reduce emissions, but it's simply impossible to put a Mercedes sedan on a CO2 diet of 130g/km," the spokeswoman said. "It's like saying that everyone is obliged to live in a 60-square-meter apartment (646 square feet), regardless of whether their household consists of one person or a family with three kids."

Customer is king

In 1998, the European Automobile Manufacturers Association (ACEA), which represents the 13 largest automakers on the continent, reached a voluntary agreement with the European Commission to reduce carbon dioxide emissions to 140 g/km over a 10 years, but is highly unlikely meet the target by next year.

Volkswagen baut Offroader

Safety and comfort matter more than eco-friendliness

"The industry has achieved a 13 percent reduction in emissions due to technological advances, but there were factors we could not control, such as regulatory requirements that have made cars safer to drive, but have increased their weight, volume and CO2 output," said ACEA spokeswoman Sigrid de Vries.

The automobile industry reacts to consumer demand, Dudenhöffer said.

"For car buyers, it's safety, price, comfort and design that come above environmental friendliness," he said, adding that lifestyle factors and aging demographics are also boosting demand for roomy SUVs and sedans.

Leaving market to decide on CO2

Automakers said they are committed to the fight against global warming, which has been a cornerstone of the German EU presidency, but added that there are also other ways to reduce emissions -- such as government vouchers for swapping in the thirsty old clunker for a brand new, fuel efficient hybrid or diesel engine.

Urlaub auf der Autobahn

Reducing traffic jams goes a long way in cutting C02 emissions

"The EU could put a price on every gram of C02 emitted by imposing a harmonized tax system across the entire bloc, so that models which are less fuel efficient would be taxed higher, driving up the price," de Vries said. "This way it would be up to market forces to determine the best way to achieve C02 targets."

European politicians are trying to set an example for the bloc's drivers. EU Environmental Commissioner Stavros Dimas is reportedly swapping his Mercedes for a fuel efficient Toyota or Lexus, while Germany's Greens party leader Renate Künast has told her countrymen to ditch their homegrown roadsters or in favor of Japanese hybrids.

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