ACEA

Reducing CO2 emissions: Progress and constraints – the industry’s commitment to this global challenge

Climate change is a global challenge which demands collective action and international cooperation. The automotive sector is playing a leading role, embracing its responsibility to reduce CO2 emissions from products in-use and production sites. Its commitment is reflected in investments in technology solutions that have brought significant cuts in CO2 emissions to cars and commercial vehicles, and in energy-efficiency improvements at plants across Europe.

The industry continues to stress the importance of joint action by all stakeholders. Vehicle makers, fuel companies, governments, transport operators and consumers must all play their part in this integrated approach necessary to reduce CO2 emissions efficiently.

Concerns remain over CO2 emission regulation which continues to point to vehicle technology as the principal means by which cuts can be delivered. Technology, however, is only one piece in a larger puzzle. It is also an expensive approach and particularly unwelcome at this time of unprecedented economic pressure on R&D budgets, jobs and production.

Investment in R&D, the development of new CO2-reduction technologies and fleet renewal are all jeopardized by an approach that continues to downplay the role of collective action.

Reducing man-made CO2 emissions is a complex issue. There are no simple solutions and no national boundaries. Every industry and individual must accept responsibility and embrace collective action.

The automotive industry fully accepts the part it must play in finding technology solutions that continue to drive down CO2 and other climate change emissions. It is actively working to reduce CO2 emissions from cars and commercial vehicles in-use, but also from its production sites, logistics and transport operations.

Cars are often cited as the most significant contributor to man-made CO2 emissions. In fact, they contribute around 12% of total CO2 emissions in Europe; with overall transport producing 26%. While a major challenge, it is clear that vehicle emissions are part of a much larger jigsaw.

Overview of global CO2 emissions

Significant cuts in CO2 emissions

Average new car CO2 emissions have fallen sharply over the past decade. Progress has been driven primarily through technology, a responsibility the industry embraced under its part of a voluntary commitment to cut CO2 emissions. This agreement was brokered by ACEA and the European Commission in 1998 and covered the years 1995 to 2008.

Though progress was countered by developments such as the parallel introduction of conflicting regulatory requirements, preliminary figures suggest that new car CO2 emissions have fallen by close to 20% (with average CO2 emissions of around 154 g/km in 2008). Drivers have, more recently, started to value fuel-efficient technologies alongside the more traditional favourites such as comfort, safety and design. CO2-related taxation introduced by various member states has also helped trigger a shift in consumer demand.

The industry will continue to drive down CO2 emissions from its products; however the importance of both, the supply and a ready demand for technological solutions, remains a clear lesson from the voluntary agreement.

Important progress in fuel efficiency

CO2 legislation

In December 2008, the European Parliament and Council approved new CO2 emission rules for passenger cars, establishing the most demanding piece of environmental legislation the automotive industry has ever faced.

The legislation mandates a reduction in tailpipe CO2 to an average of 130 g/km (by 2012 for 65% of newly registered cars, increasing to 100% by 2015) through technology measures. The auto industry is characterised by long development and production cycles. It is therefore encouraging that the new car CO2 regulation provides some flexibility in implementation.

Nevertheless, disproportionate fines, which amount to around 15 times the cost of carbon in other markets, remain a matter of concern. In the face of the current economic downturn, they represent an additional burden for an industry already battling job losses and production cuts across the EU.

• Read more about key points in the regulation on passenger cars

Supporting the industry

It is clear that the economic conditions in which the industry is now operating are extraordinary and fleet renewal is under pressure. Achieving CO2 reduction targets will require renewed focus, support and collective action from all stakeholders. While the industry is fully committed to fulfil the requirements, it is concerned by pending legislation concerning light commercial vehicles as well as for CO2 targets for vehicles in the longer term.

• Read more about pending legislation on CO2 from light commercial vehicles
• Read more about commercial vehicles: the business of fuel efficiency

Technological advances depend on a thriving auto industry and significant investment in R&D programmes. Each year, the industry spends more on R&D than any other private sector in Europe at €20 billion or 4% of turnover. However, weak demand for vehicles puts pressure on manufacturers to reduce all costs, forcing a review of R&D budgets.

The industry welcomed the €4 billion annual Clean Transport Facility fund (status quo January 2009) from the European Investment Bank. Clearly however, for a sector that invests five times as much annually in technologies that are helping find lower-carbon-emitting solutions for future vehicles, it alone is not sufficient.

In addition to car technology, the driver, choice of fuel and quality of infrastructure are decisive factors in achieving the best possible fuel economy and hence, lowest CO2 emissions, and the industry has consistently urged that governments, fuel companies and consumers play their part in driving down CO2 too.

• Read more about eco-driving

Experience of the 1998 voluntary agreement shows that demand measures are critical to drive up sales of fuel-efficient models which may be more expensive in the showroom due to the additional production costs in their manufacture.

The establishing of comprehensive refuelling networks must also be a priority. As alternatively-fuelled cars and more all electric vehicles are delivered to market, consumers must be confident they will have the necessary support to refuel them.

• Read more about the electrification of the automobile
• Interview with ACEA Secretary General Ivan Hodac on electric vehicles

Combating climate change - the next steps

The Commission has set targets for average new car CO2 emissions of 95 g/km by 2020. Long-term targets are welcomed by manufacturers because they deliver certainty in product planning, allowing for long development cycles in the industry. However, thorough impact assessments must underpin proposals to ensure that benefits to society are delivered in the most cost-effective way.

The lessons from car CO2 reduction targets over the last ten years must be learned. Investment in R&D, delivering new technologies as well as optimized products, remains a testament to the industry’s on-going commitment. Cost- effective measures that deliver the greatest benefit to the environment must be adopted, and additional support given to a sector that will continue to innovate and invest in technology and engineering solutions.

Average car emissions average below 120 g/km is possible if appropriate policy measures are put in place - and all parties are involved. A holistic and cost-effective approach that includes better infrastructure, congestion reduction measures, the supply of a sufficient infrastructure for alternative fuels and other energy sources, and a Europe-wide taxation based on use will bring great benefits to the economy, lower emissions from all road transport (not just new cars) and strength to an auto industry that continues to innovate to find technology solutions. The benefits of an integrated approach to achieve EU CO2 reduction targets have never been in sharper focus.

• Read more about the automobile industry and climate change from a long-term perspective
• "Transport central in third industrial revolution": Jeremy Rifkin outlines his vision for sustainable energy and transport policies

last update 14/07/2010

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