New CO2 rules must balance environmental aims with affordable cars

The European Commission has published its proposals for a new regulatory framework, setting limits for new car CO2 emissions from 2012. And while the industry is committed to continuing to work with policy makers to shape a workable solution, the Commission's proposal has led to concerns, in particular about unrealistic lead-times and costs of non-compliance.

'We support challenging targets, and in Britain alone we have cut CO2 by an estimated one million tonnes per year since 1997 through cleaner car technologies,' said Christopher Macgowan, SMMT chief executive. 'However, manufacturers must not be penalised for past decisions on product development. Proposals must be achievable and cost-effective, implementation dates must be realistic and fines proportionate if we are to maintain the breadth and diversity of automotive manufacturing across the UK.'

The industry is encouraged to note that weight has been chosen as the parameter by which the Commission sets targets for individual manufacturers. This means that those making small city cars may face lower CO2 targets than manufacturers of heavier, luxury models.

Within the framework, the Commission must recognise and protect the UK's unique lead in making luxury, low volume and specialist sports cars. Low volume producers are estimated to deliver turnover of over £1bn to UK plc, employ almost 6,000 people and produce approx 15,000 cars per year. We look forward to working with policy makers to ensure appropriate parameters and exemptions are included in the rules to ensure jobs, skills and investment stay in the UK.

However, according to the Commission's own assessment, production costs could increase by six per cent per car. Furthermore, proposed fines are inconsistent with the market price of carbon. According to figures revealed, penalties could be as much as 14 times more onerous than under schemes like ETS – the European emission trading scheme. This is totally disproportionate.

Christopher Macgowan added, 'The Commission acknowledges that investment in new technology has delivered significant and sustained CO2 cuts from new cars in the last decade. A more integrated approach will build on these manufacturer-led reductions and should be adopted going forward. Partnership between fuel companies, governments and consumers will drive demand and lead to the greatest CO2 reductions at the lowest cost to car makers.