ACEA

ACEA-president Marchionne on CO2 debate; automotive competitiveness in the EU-27

Commission vice president,
Members of the European Parliament
Your Excellencies,
Ministers,
Colleagues,
Ladies and Gentlemen,


It is a pleasure being here today to address this important seminar, a joint initiative of the Czech Permanent Representation to the EU and the European Automobile Manufacturers Association -- and the very first of its kind. I am sure to be speaking in name of all my colleagues in the ACEA board when I express my satisfaction about the high-level attendance of this meeting today, and the great number of participants.

I sincerely believe this seminar will prove to be a platform to exchanging views, sharing experiences and deepening the dialogue between national governments, EU politics and the European automotive industry. That is needed, as I will explain to you in the coming minutes, especially in a EU of 27.

The role of our industry

We all know that the automotive industry is a key element in the fabric of European economies and societies. Our industry is essential for the health and wealth of the European Union, and it is vital that our industry retains and improves its competitive and innovative stand, especially in today’s fiercely competitive environment.

In this endeavour, the New EU Member States have a vital role to play. It is absolutely essential to establish a regulatory framework in which the industry can continue to develop and fulfill its economic and societal role.

It is no secret for anyone that the automotive industry is one of the most regulated in Europe. This is due to the technological complexity of the automotive product itself and to the implications of the use of motor vehicles with regard to the environment, safety and mobility. Today, there are roughly 80 European directives and 115 UN-ECE pieces of legislation that relate to motor vehicles.

I do not want to overwhelm you with pessimistic feelings, but a simple ‘shopping list’ of most recent regulatory issues will vividly illustrate this reality. We had to deal, and are still dealing with:

• Block exemption rules;


• exhaust emissions limit values for cars and trucks;


• CO2-emission reductions (I will come back to this issue in a minute);


• Road Safety Action Plans;


• EuroNCAP requirements;


• Pedestrian Safety;


• E-Safety initiative;


• Chemicals Policy (REACH);


• End-of-Life Vehicles;


• Mobility and Congestion charging;

At the same time, I think we are often too shy when we communicate about our achievements and the many challenges we have taken up. Let me briefly mention some.

1. We have drastically reduced the impact of motor vehicles on the environment. 100 of today’s cars produce the same amount of emissions as an average car built in the 1970s. In the last 20 years, the amount of local pollutants has been divided by 20. It is meanwhile fair to say that the problem of pollution in modern vehicles has been solved, but that it will be visible only in 10 years when the various generations of older vehicles will have started to disappear from our roads. Especially in the Central and Eastern European Countries this is an issue of importance since there, the age of an average car is 13 to 14 years; therefore a special attention must be paid to the renewal of the car fleet, avoiding to penalise the new car sales.


2. We have made tremendous progress in the recycling of our products with the aim to achieve the very ambitious target rate set out by the EU. We have also significantly modernised and improved all our industrial processes, in terms of waste management and savings of water and energy;


3. Noise levels of motor vehicles have been reduced by 90 % since 1970;


4. In the safety area, the number of road casualties has been halved in the last two decades, while traffic has tripled. This is mainly due to the dramatic progress made in vehicle safety. The introduction of seatbelts, airbags and ABS alone have reduced by 80 % the number of fatal or serious injuries to vehicle passengers. All this with car manufacturer’s efforts beyond the legislation requirements.
   - Clearly, better road safety is a never-ending battle, and the 40,000 casualties occurring each year on European roads are still an unbearable toll to our societies, but the automotive industry cannot be taken for the only one player in this area. If we want to win the challenge, we need an “integrated approach”, addressing also infrastructure, enforcement of traffic law and driver behavior;


5. Let me be about one thing absolutely clear: this industry is fully aware of the challenges posed by CO2 emissions. We have signed and delivered on our 1998 Commitment to reduce CO2 emissions from cars. And we fully support the EU objective of reducing car emissions to an average of 120 g/km by 2012.




• Everything depends, however, on how this goal will be achieved. Because, whilst the actual CO2 emissions per vehicle steadily decrease thanks to the many technological improvements by the European car manufacturers, the rise in CO2 emissions from overall traffic has until now at best slowed down. It is very important that governments and the public at large understand these two opposite trends and design a policy that addresses the true challenge.


• The future of CO2-emission reductions lays to a much lesser extent than before in technological improvements: significant progress has been made through new engine technologies, cleaner fuels and better fuel-efficiency. The average level of CO2 emissions from new cars has been lowered by almost 13 % since 1995, thanks to the commitment that our industry has voluntarily agreed to in 1998.


• But the results could have been larger if there had not been the counter-productive effect from EU-regulations (safety, air quality and others) and a market trend towards more comfortable and safer cars that make them necessarily heavier and less efficient, and finally a weak demand for fuel-efficient cars.


• These external factors need to be taken into account when assessing the results of the 1998 Commitment, as is stipulated in the Commitment’s text, signed by the industry and the Commission. We urge the Commission to recognise this fact.


• The lessons from the past should be reflected in future policy. It is clear that the vehicle industry cannot solve the CO2-problem on its own. Further cost-effective contributions can only be made when the on-going technological improvements of this industry are complemented by other measures: improving traffic management, adjusting infrastructure, increasing the use and availability of alternative fuels, changing driving behavior and influencing consumer demand through taxation. Needed is, like in the case of improving road safety, an “integrated approach”.


• The European Commission proposal currently on the table puts the burden of reducing CO2 emissions from cars, again, mainly on the automobile manufacturers. It is prohibitively expensive to achieve a target of 130 g/km through vehicle technology only, and it is unrealistic to believe this can be done by 2012. The announced legislative framework will not be ready before 2009: this leaves the industry too little time to apply by 2012; the cars of 2012 will be on the drawing table tomorrow.


• It is absolutely essential for the future strength of our industry that the EU decides on a CO2 strategy that is cost-effective and fair, and that takes into account the complexity and the global nature of climate change. The final objective of 120 by 2012 through the integrated approach is achievable, when the right measures are put in place. The industry stresses the need for a much more factual debate, fed by thorough impact assessments, as opposed to the current highly-emotional discourse, carrying some clear ideological elements.







The need for a real Industrial Policy


Ladies and gentleman, I think I have by now outlined the continued efforts and commitments of our industry to commit and to innovate. European automobile manufacturers invest every year 8 % of their turnover in new facilities, equipment, processes, technologies. They spend 5% of their turnover in research and development, mainly geared at improving the sustainability of mobility. These rates are among the highest in Europe.

There is, however no room for complacency. The automotive industry believes that strong efforts have to be made in a number of areas to maintain and improve the competitiveness of our sector:




1. As I have already mentioned, real completion of the Internal Market has still to be achieved, and will not be without fiscal harmonisation of motor vehicle and fuel taxes. In light of the CO2 challenge, taxation schemes should be based on the CO2 emissions of cars and of alternative fuels, to increase demand for fuel-efficiency;


2. The down-side effects of over-regulation and possible conflicting objectives of legislation need to be avoided, via adequate and independent impact assessment studies, and reasonable lead-time periods for implementation;


3. The Competitiveness Council should play a key role in ensuring the correct balance between public policy interests and economic considerations;


4. Greater effectiveness in R&D efforts and innovation policy instruments should be promoted;


5. Global harmonisation of technical regulations and standards for motor vehicles should be sought at international level;


6. The continuous development of efficient road infrastructure, while ensuring the competitive access to basic infrastructure networks (road, energy, transport, telecommunications) should be promoted;


7. Market access for European automotive products should be improved, via the completion of the WTO’s Doha Development Agenda and other bilateral/regional free trade agreements;


8. Policy makers should follow an Integrated Approach to important societal issues such as road safety and CO2-emission reduction. Cost-effectiveness for industry and for society, should be the guiding principle.


Many of these issues were addressed in the CARS21 process, which started in 2005. CARS21 was recognition of the fact that the regulatory framework does affect the industry’s strength. CARS21 incorporated the principles of “better regulation”: less and simpler legislation, the need to assess the impact of new regulation before its adoption, cost-effectiveness as overarching guideline.

The European Commission has now formalised CARS21 with a recent Communication that has been sent to the Council and Parliament. Regrettably, not all principles were taken on board to their full extent. That is worrying, because CARS 21 dealt with balancing economic and environmental issues in a cost-effective and sustainable way. It was an example of coherent and responsible industrial policy and carried all ingredients for contributing to – most explicitly - the comprehensive climate change policy society wants.

This will not stop us, however, as an industry, to carry the CARS 21 principles high and scrutinise or comment everyone of the proposals coming to us. It is not very difficult to predict that the CO2 dossier will put the meaning of the CARS 21 principles to the test.

It is absolutely crucial that we make progress where the strength of this industry, and of the whole EU economy are concerned - even more so now that we are 27 in the European Union.

I am firmly convinced that the EU enlargement provides us all with more opportunities than challenges. I say this with regard to market prospects, economic and social growth, but also with regard to the new regulatory approach, which is needed and which I have described.

Merely because of the significant changes they had to undergo in the last decades, the new member States can contribute a lot in encouraging the development of efficient, transparent and predictable EU decision-making processes, in supporting efficient completion of the Internal Market, and in inspiring a new entrepreneurial impetus to our continent.

We definitely count on you and we look forward to continue working together in the future. Thank you for your attention.

Attachments

• Speech_Marchionne_March20~Speech Marchionne.pdf

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