EU to unveil multi-billion euro support scheme for auto sector

Car industry groups want tariff-free trade with the UK after Brexit. They argue every vehicle relies on parts made in different EU countries.

EXCLUSIVE: The EU pledges funding worth billions of euros to the automotive industry up 2020 in a leaked draft of its cars strategy, to be presented today (8 November). The new strategy comes amid a wave of announced factory closures and lay-offs in the sector but was criticised by Green activists for lacking ambition on CO2 emission cuts.


Antonio Tajani, EU Commissioner for Industry and Entrepreneurship, is due to present the ‘Cars 2020’ strategy on Thursday (8 November).

In the draft document, seen by EURACTIV, the EU executive says it intends to support the growth of the automotive sector into 20% of European GDP by 2020, from its current level of 16%, laying out a number of financing mechanisms for the sector.

The document earmarks a share of the planned €80 billion ‘Horizon 2020’ research and innovation fund and the €2.5 billion Competitiveness of Enterprises and SMEs programme, as well as support for workers laid off as a result of “industrial adjustment” in the European Globalisation Adjustment Fund (EGF)

The EU plan follows a series of recent closures of automotive factories across Europe, such as Ford plants in Genk (Belgium) and Southampton (UK). Peugeot, Europe's second-biggest automaker, has announced plans to cut 8,000 additional French jobs, close a major assembly plant near Paris and shrink another. Fiat assembly lines in Italy are also facing closure, while German automaker Opel is considering shutting down its plant in Bochum, Germany.

To help the crisis-ridden sector, the Commission also calls for strong backing from the European Investment Bank. “The Commission will continue working with the EIB in order to ensure that financing for automotive research and innovation projects is available,” the document reads. Lawmakers view the EGF as a 'safety net' for those workers facing an uncertain future in the industry.

But environmental groups have been left unsatisfied by what they view as the draft’s relative lack of focus on freight emission reductions and consumer awareness.

‘Regulatory holiday’

Greg Archer of Transport & Environment told EURACTIV the action plan “fails to implement key opportunities to reduce emissions from freight [and] provide consumers with understandable reliable information about fuel costs from low-carbon vehicles.”

In the draft the EU executive bars out a paragraph referring to emissions from HDVs – heavy-duty vehicles – as well as references to consumer awareness and harmonisation of labels for fuel consumption and CO2 emissions.

Franziska Achterberg, an EU policy advisor at Greenpeace Europe, told EURACTIV she thought Tajani was giving too much of a “regulatory break” to carmakers, saying more emphasis should have been put on developing green technologies.

“The European industry will only be competitive if it develops and markets new environmental technologies,” she said adding: “This isn’t going to happen without pressure from regulation”.

Tajani has said he wished to impose a regulatory moratorium on the car industry to ensure the survival of sector after the economic crisis.

“The funding is not matched with the right conditions to make sure it is going in the right direction,” she said.

Smart regulation

Archer also said the paper “fails to recognise the benefits of smart regulation”, influencing the EU's ability to grow and create jobs.

But Jean-Marc Gales, chief executive of the European Association of Automotive Suppliers, which was involved in drafting the document, told EURACTIV that this did not necessarily mean doing everything that is “technically feasible”.

“You do what is necessary for what will keep [Europe’s] lead in the automotive industry,” he said, adding he did not think that the EU needed to impose regulations on freight.

Fuel efficiency "is the first purchasing criteria” for commercial vehicles, he said. “The market pushes for lower fuel consumption. “Will it still be smart regulation if the market pushes for it? European trucks are the best worldwide for fuel consumption.”

He said he supported the regulation proposed by Tajani and that the essential ‘green’ element – a ceiling of 95g/km of CO2 – was included. “A cost-benefit analysis… has found the best compromise”.

Niall Carty, a communications manager at the Fédération Internationale de l'Automobile, told EURACTIV the car consumer group has “always pushed for ambitious targets” on green vehicles, believing that they will offer the consumer value for money in the long term.

“We believe that the 95 [grams of CO2 per km by 2020] targets are possible and are proven to be possible”, he said.

He said studies showed that green technologies could save the consumer up to €800 per year, depending on the price of oil.

Carty said FIA wished to see strict targets for vans as well as cars, expressing support for the Commission’s proposed targets for vans of 147g/km by 2020. He also said FIA was in favour of green labelling, which “provides valuable information about the fuel and environmental costs”.

Passenger cars alone are responsible for around 12% of total EU emissions of carbon dioxide (CO2), the main greenhouse gas.

In 2007, the EU proposed legislation setting emission performance standards for new cars, which was adopted in 2009 by the European Parliament and the EU Council of Ministers. Today's EU targets ensure that average emissions from new passenger cars do not exceed 130 grams of CO2 per km (g/km) by 2015.

A White Paper on Transport, presented by the Commission in February 2011, flagged measures to raise the €1.8 trillion which the EU says is needed for infrastructure investment in the next 20 years.

Proposals published earlier this year have set a further targets of 95 grams for new passenger cars by 2020, and 147 g/km for vans. By the end of 2014, new targets could be announced for 2025 and 2030.

  • 8 Nov. 2012: The European Commission to adopt the “Cars 2020: Action Plan for a competitive and sustainable automotive industry in Europe”.

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