"Despite the growing number of cars on the road worldwide, the automotive industry has a significant opportunity to reduce greenhouse gas emissions from the use of passenger vehicles, much of it using proven technologies," concludes a report released last week by global management consulting company McKinsey.
Last December, the EU agreed to limit CO2 emissions from new vehicles from current levels of around 160g to 120g/km by 2015 (EurActiv 02/12/08).
But the deal was criticised by the European Automobile Manufacturers' Association (ACEA) for being "too tough" on the industry, which would prefer the bloc to provide a supportive framework for manufacturing, including measures such as low-interest loan packages, market incentives for take-up of new technologies and better regulation.
Indeed, the McKinsey report notes that "the economics of some fuel-efficiency packages are not attractive to buyers of new cars in the absence of tax breaks, subsidies or other mechanisms to lower initial costs," whereas rapid introduction of a high carbon tax to stimulate changes in consumer behaviour "could undermine the industry's economics, with potentially serious negative implications for the global economy as a whole".
Recovery in the auto sector can only come "through radical product innovation," and while the amount of investment needed to achieve this is huge, the situation implies "a massive business opportunity" for creative and forward-looking organisations.
"Companies that are able to commercialise relevant technologies will face rapid growth in demand, if and when carbon emissions are priced and emission-reduction targets are enacted," the report concludes.
Without action, CO2 emissions from the passenger car sector are projected to increase by 54% globally by 2030, as the number of cars on the road is expected to nearly double to 1.3 billion. However, the sector has the potential to reduce emissions by 47% during the same period, the report adds.
The reductions could be achieved by investing in "more fuel-efficient vehicles, broadening use of biofuels, improving road and traffic infrastructure, and stimulating greater use of public transport and eco-friendly driving habits," argues the report. Increasing fuel efficiency of new vehicles alone could account for 72% of the potential for scrapping emissions, it adds.
In this "mixed-technology scenario," average well-to-wheel emissions from new vehicles would fall to 150 grams of CO2 per kilometre travelled.
The report is based on the findings of an 18-month research project into potential measures to reduce emissions from the use of private vehicles.
