New climate rules for cars will save billions
Connie Hedegaard, the EU Climate Action commissioner, argues that tougher standards for automotive carbon emissions are good Europe’s long-term economic and environmental health.
"Do we really need more rules from the EU?" some might have thought when I presented the Commission's proposals for further reducing CO2 emissions from cars and vans earlier this month.
The answer is: yes, we do need them. There is nothing wrong with new rules when they are well thought through and subjected to rigorous analysis, as ours have been. Environmental protection in Europe is one long story about the progress we can achieve when we make sensible regulation. Years ago we took the first steps to tackle emissions from cars. And it has worked. Just look how much the fuel economy of new cars has improved compared to just a few years ago. It is EU rules that have pushed this progress. And this is a great example of an area where it makes sense to do things together in Europe rather than developing 27 different national systems.
Not only do the new rules mean that by 2030 the climate will be spared an amount of CO2 roughly equivalent to the total annual emissions of Italy today. They will also give car owners more money in their pockets and encourage the European automotive sector to focus its efforts on research and development of innovative fuel-efficient technologies that can strengthen its competitive edge.
What we are proposing now, is something we have done before, and it has helped our industry to stay on the tip of its toe when it comes to innovation. We now ask for cars to reduce their greenhouse gas emissions by 95 grams CO2 per kilometre by 2020, and vans by 147 grams. Is that ambitious? Yes, but our impact analysis shows these targets are technologically feasible and highly cost-effective at the same time.
From some parts of industry we have heard that the targets will be difficult to achieve while NGOs have called for much stricter targets. I believe we have struck a good balance by proposing to implement targets that are ambitious but achievable. And I am glad that both the European Consumers' Organisation and the European Association of Automotive Suppliers agree.
With the new rules, Europe will have some of the world's most strict CO2 standards for cars – and thus also for fuel efficiency. And that's good, because there is no doubt that this will be a decisive competitive factor in the automotive industry for many years to come. Despite the economic crisis, the oil price is still at $100 per barrel, and there is no immediate prospect of any big and lasting fall.
The savings for Europe will be huge. At current fuel prices we will avoid fuel costs totalling €30 billion every year from 2020 onwards. That will be felt clearly by businesses as well as consumers. And it can give a significant boost to our trade balance, which today is burdened by our excessive oil imports.
What does it mean for the ordinary car owner? To begin with, it won't mean the world. The rules apply only to new cars, and they will only be fully implemented by 2020. By then, buying a new car may become slightly more expensive, but any additional up-front cost will be earned back within a few years, since lower CO2 emissions also mean lower fuel costs. According to our calculations, the average car owner could save around €340 on their fuel bill each year at current prices. And over the full lifetime of the car, the net savings will amount to around €2,000 – the extra up-front costs included.
The ball is now in the court of EU environment ministers and of the European Parliament. It is their responsibility to maintain the ambition. Because it goes without saying: if the proposal is watered down, the economic benefits for consumers and businesses will shrink accordingly.