A key part of the Commission's economic recovery plan, adopted on 26 November 2008, is developing clean technologies for cars.
The EU executive is proposing combined funding of at least €5 billion as part of a "smart mix" of regulation which includes R&D, national investment, Commission funding, European Investment Bank support and public private partnerships for the automobile sector.
According to the Commission, the aim of the European green cars initiative is to protect jobs in the car sector and "to ensure its long-term viability by encouraging sustainable reform that embraces new environmentally friendly technology," making Europe's car manufacturers world leaders in this increasingly competitive market.
Overall, it is hoped that the initiative will help the car sector in two ways:
- Via the EU's general fiscal stimulus plan of some €200 billion, which is hoped to directly boost car industry by increasing purchasing power and helping restore confidence;
- by ensuring that banks maintain and increase lending at affordable rates to help small businesses and individuals to make large purchases, like cars.
More specific measures aimed at boosting Europe's ailing car industry include:
- Temporary authorisation to member states to subsidise the part of the cost of guarantees for loans to car producers;
- support for the EIB to provide loans to car companies and their suppliers to finance innovation in clean technologies;
- development of a €5 billion public private research partnership for 'European green cars' initiative, accompanied by demand side measures, such as a reduction of registration and circulation taxes for lower emission cars, and;
- temporary authorisation for member states to provide subsidised loans for investment in new cars which either anticipate or go beyond new Community environmental standards before they enter into force.