A new report by the environmental pressure group Transport and Environment (T&E) has found that the average car sold in Europe last year was 4% more fuel efficient, emitted 4% less CO2, and yet was 2.5% cheaper in real terms than the year before.
The T&E report examined two cost estimates carried out for the European Commission, in 2001 by AEA Technology, and in 2006 by a consortium led by TNO, two research and consultancy companies.
Both were based on data supplied by the car industry.
The earlier report predicted that reaching 140 g CO2/km would cause the retail price of the average new car to increase by €2,400; the later study said €1200.
But despite increased fuel efficiencies, as a result of EU regulations, the report found that year-on-year prices had consistently fallen.
Jos Dings, T&E's director, issued a statement saying the EU should take "misleading" auto industry cost estimates with "an SUV-sized pinch of salt" in the future.
"The car industry has consistently resisted fuel efficiency regulations by complaining that cars would become 'unaffordable'," he said. "But car emissions have now dropped to 140 g CO2/km and that simply hasn't happened, prices have actually fallen in real terms."
Adding €3,000 to the price of a car?
The European Automobile Manufacturers Association (ACEA), which represents car-makers such as BMW, Daimler, Fiat, Ford and General Motors, has previously argued that a lower EU target of 130 g CO2/km by 2012 would "lead to a price increase per car of up to €3,000 on average".
This in turn would lead to European job losses, and the relocation of car plants outside the EU, they argued.
Contacted by EurActiv, an ACEA spokesperson provided a written response hailing the "great progress" made by the auto industry in reducing CO2 emissions.
The industry believes that a range of factors should be considered by legislators drafting CO2 legislation, including "manufacturing lead-time, affordability, support for breakthrough technologies, relevant infrastructure changes, the use of alternative fuels, and the need for market incentives," Sigrid de Vries said.
Car manufacturers' absorption of fuel efficiency costs had similarly been influenced by the economic environment, market demand, business models, the location of manufacturing and the pace of R&D expenditure, ACEA argues.
"This will not be any different in the future," de Vries added.
In 2009, the EU set its first legally-binding fuel efficiency standards for automobile CO2 emissions, and from the beginning of 2012, emissions from new cars should not exceed 130 g CO2/km.
Implementation of a 2015 standard of 120 g CO2/km is also beginning. For 2020, Brussels has a fixed objective of 95g CO2/km, which should be confirmed in 2013. This would be close to the most ambitious US scenario for 2025.
Passenger cars today account for as much as 10% of global CO2 emissions.
COMMENTS
Why the cynical undertone on the industry's reaction and claims? The green anti-car lobby basically accuses the industry of lying, yet it could very well be that the costs for the reduction have indeed been absorbed by job losses in Europe. The car industry is extremely competitive and rising costs will have been offset by savings elsewhere. The industry will never admit it might have shifted production or cut jobs. As the green lobby is clearly biased as far as the car industry is concerned, it would be interesting to let a more independent survey figure out the truth behind this story. As in most cases, these endless 'for' and 'against' stories from Brussels are utterly useless for any serious exchange of arguments and will certainly not enhance the quality of any future legislation.
Another possibility is that people are finally moving away from (fuel inefficient and expensive) SUVs and towards “normal” cars. This would increase fleet fuel efficiency and make the “average car” look cheaper.
The connection between “job losses” and lower cost cars is speculative at best. The Euro automotive industry is already highly automated. Areas where money could still be saved include energy saving. Two Fraunhofers produced a report in 2009 which noted that German manufacturing industry could reduce energy expenditures by 25%. Such action would of course result in cheaper cars.
In a related area, there is a general move towards smaller engines (1.4 litre or smaller instead of 1.8 litre or larger) and fewer cylinders (2 or 3 instead of 4) – this makes for cheaper engines that are also of course more fuel efficient.
The previous poster claimed that “the green lobby is clearly biased” – that would be biased in favour of more fuel efficient cars, as opposed to the poster who would favour less fuel efficient cars?
What the T&E report shows is that only legislation moves companies, “pretty please” (the voluntary approach) achieves nothing.
In his interesting contribution above Mr. Parr calls the relation between job losses and lower costs speculative at best, but most of the jobs in the car industry can be found with the suppliers of the different parts the cars are made up of, and it is known that these suppliers are the first to feel any pain from rising costs the manufacturers might be confronted with. Many of these suppliers will have outsourced production to China or other countries in Asia already, others will be tempted to do so, if the pressure mounts. Some of these suppliers are extremely innovative firms, and merit all the support they can get. As for the green lobby's bias towards the industry: I was in particular referring to the accusation that the industry is lying. I don't think the green lobby is the most reliable source for that claim. I'm all for fuel efficient cars, don't get me wrong, but I don't think the procurement of legislation in this area should be a monopoly of the green lobby. A better environment and balanced legislation is a matter for all (political) parties involved.
As I said - speculative - if Stepson has proof - then show it - otherwise as somebody once said about courage - its just wind. By the way, as somebody that has contact with the Tier 1 and 2s whilst there is pressure to reduce costs, there is also pressure to keep up quality - not something that is easy to do when outsourcing to China.
The Euro OEMs lying - gosh why would I think that - given the promises they made in 1998 (CO2 reduction) and then broke? And then proceeded to exaggerate the difficulty of getting to 120/130? Are you employed by the OEMs or their suppliers Mr Stepson?
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