EU emissions rules wound back

German carmakers have forced the European Union into compromising on its strict 2020 carbon dioxide emissions targets.

The EU last week agreed to implement a target figure of 95 grams of CO2 per kilometre (around 4L/100km) in a deal complicated by German carmakers’ demands for greater flexibility and allowances for their larger engine capacities.

The German manufacturers have claimed the new rules unfairly target them for producing larger, more luxurious, more profitable and higher performing six and eight-cylinder cars. This is in contrast to the Peugeot, Citroen, Renault and the Fiat Group fleets which are dominated by four-cylinder cars.

The Germans have also argued that the low-emission cars demanded by the EU rules will force them to introduce unprofitable models, citing as proof the enormous losses in Europe by A and B segment carmakers (such as Peugeot, Citroen and the Fiat Group).

Yet other EU member countries rejected Germany’s plan for its carmakers to carry over any pollution credits (the difference between its current and future fleet emissions and existing limits) to help them meet the 2020 requirements.

But the EU rules are not so clear cut as a simple 95 gram limit, and the European Commission assigns each carmaker its own target based on their historical cuts and the size and model mix of their new car fleets.

In spite of the German arguments, Ireland (the current holder of the rotating EU presidency) negotiated the deal, which it argued took into account both the manufacturing and environmental considerations needed for Europe’s future prosperity.

“This agreement clearly represents a win-win for climate, consumers, innovation and jobs and provides another important step towards a competitive, low-carbon economy,” Irish Environment Minister, Phil Hogan, said in a statement.

Germany could still torpedo the new rules, because they need to be approved by each of the EU’s member states to be ratified.

One area that could sway Germany to ratify the new rules is that every electric car sold in 2020 can be counted twice. Effectively, it means that every electric car sold (or leased) will allow a carmaker to sell a single 180-gram large car with no penalty.

The upcoming rules were a large part of BMW’s rationale for pursuing its i3 and i8 electric and hybrid models, though Audi has recently cancelled its entire electric-car program in favour of plug-in hybrids.

Porsche, which makes nothing but six and eight-cylinder cars and SUVs, will struggle more than the mainstream makers, but may have the ability to roll its fleet emissions into the Volkswagen Group numbers.

The European new car fleet averaged around 132g/km in 2011, according to figures from the International Council on Clean Transportation. Germany’s fleet averaged around 147g/km in the same period.

It could have been far worse for the Germans, with the EU originally targeting between 68 and 78g/km (or around 3L/100km) as the average fleet consumption of each carmaker by 2025.

While the EU failed to agree to the 2025 target in its latest round of negotiations, it has given itself until 2015 to cement a figure.

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