EU governments clash on car CO2 plans[fr][de] 

A first ministerial debate in the Environment Council on 3 March on the Commission's December proposal revealed a clear standoff between the French and the Germans. 

The dispute centred on how much of the burden for cutting average fleet emissions should be borne by small vehicle manufacturers, mainly located in France and Italy, and how much should be borne by larger ones, mainly in Germany and Sweden. 

Burden-sharing and the 'slope of the curve': 

The 'slope of the curve' indicates how strongly CO2 standards depend on a car's mass under the Commission's weight-based proposal. 

If targets were based solely on weight (i.e. a vertical slope), manufacturers of larger vehicles would have no incentive to make their cars lighter – and thus more fuel-efficient – as any loss in mass would immediately result in stricter CO2 targets. Such a curve would also penalise manufacturers of small cars by requiring them to achieve much lower emission levels than for heavier cars, despite the fact that they already emit less. 

While the Commission is pushing for a 60% slope, Germany is insisting on an 80% slope to accommodate its companies including Mercedes, BMW and Porsche. French environment minister Jean-Louis Borloo however said that even a 60% slope would be "very difficult" to achieve and that 30% should be the maximum. 

The Czech Republic, Hungary, Austria and Slovakia, which are all home to German car manufacturing hubs, as well as Sweden, with its Saab and Volvo brands, backed Germany, while France was supported by Italy, Spain and Romania. 

Britain, on the other hand, took an alternative approach, calling for a "simpler 25% effort by everybody", but with exemptions for "niche market" producers such as Rolls Royce and Bentley. 

Penalties to boost compliance? 

Environment ministers also clashed on the size of fines for manufacturers that miss their individual CO2 targets, with many delegations saying the Commission proposals were "excessive" and would both push up car prices and lead to a slower renewal of the existing fleet. 

The issue of penalties has also been raised by Parliament's legal affairs committee, which has requested legal advice on whether the Commission has the authority to impose fines, pointing to a Court of Justice ruling which states that decisions regarding types and levels of criminal penalties must be left to the discretion of member states (EurActiv 24/10/07). 

"We must revisit the levels of the fines. All categories must bear the burden," said German Secretary of State for the environment Matthias Machnig, adding that if the small car segment does not contribute in the coming years, the EU will fail to achieve the desired emission cuts in the mass market. 

However, French Environment Minister Jean-Louis Borloo commented: "It is hard to accept that heavier and more powerful cars with greater emissions should have the right to emit more than others." 

Nevertheless, in a parallel encounter, German Chancellor Angela Merkel said she and French President Nicolas Sarkozy had discussed the issue and that a deal could be envisaged "in the coming days." According to Sarkozy, if the two countries succeed in clinching a deal, it could speed up matters at EU level. "We couldn't find more different positions than those of France and Germany," he said. 

British Environment Secretary Hilary Benn however said the problem was that "the current proposal does not pass the competitive neutral test". He wants a simpler system where all manufacturers are required to make a 25% effort. 

While the auto industry is avoiding the weight debate in order to present a united front, it has taken issue with the level of penalties proposed by the Commission, charging them as "exorbitant and disproportionate". "Industry is not disputing the target and it's not against legislation […] But the penalties are far too high and disproportionate in comparison to other sectors," said Sigrid de Vries, a spokeswoman for the European Automobile Manufacturers' Association (ACEA). 

But green NGO Transport and Environment (T&E) says penalties have not been set high enough to ensure full compliance. "On the basis of the studies done for the Commission such a level is €150 per gram of CO2 exceeded per car," it stressed, adding: "We would like to stress that the €20, €35 and €60 levels of penalties, as proposed by the Commission for 2012-14, is well below the penalty level in the EU Emissions Trading Scheme of €100 per tonne of CO2". 

It further insists that a weight-based system is "counterproductive in environmental and safety terms as it takes away a large part of the incentive to make cars lighter".