CO2 Emissions Targets 2020

FIA Region I Briefing on CO2 Emissions Targets 2020

ENVIRONMENT CONSUMER PROTECTION

Executive Summary We welcome the prospect of lower costs and improved efficiency expected as a result of the European Commission’s proposal to limit CO2 emissions to an average of 95 grams per kilometre (g/km) for cars and 147 g/km for vans by 2020. However, more should be done to ensure that the targets deliver the announced benefits for the environment and the consumers.

Legislative Background The European Commission put forward proposals1 to implement targets that aim to considerably reduce carbon dioxide (CO2) emissions from new cars and light commercial vehicles (vans) by 2020 on 11 July 2012. The proposals will cut average emissions from new cars to 95 grams of CO2 per km (g CO2/km) in 2020 from 135.7g in 2011 and a mandatory target of 130g in 2015. Emissions from vans will be reduced to 147g CO2/km in 2020 from 181.4g in 2010 (the latest year for which figures are available) and a mandatory target of 175g in 2017.

The proposals represent a further contribution towards meeting the EU’s goal of cutting overall greenhouse gas emissions to 20% below 1990 levels by 2020 and also towards decarbonising the transport sector, in line with the EU’s climate change policy and the Transport White Paper. Cars and vans together account for around 15% of EU CO2 emissions, including emissions from fuel supply. According to the European Commission, compared with the 2015/2017 targets, it is estimated that consumers will save €27bn per year in fuel costs in 2025, rising to €36bn in 2030. The 2020 targets could increase EU GDP by €12bn annually and spending on employment by some €9bn a year.

The Commission’s legislative proposal for implementing the 95g/km target includes the following provisions: • The 95g/km target is to be achieved on average across all new cars sold in 2020. Individual cars can be above or below the limit. Vehicle manufacturers have to ensure that the average of their new sales meets these levels. Each manufacturer gets an individual annual target linked to the size (measured by weight) of all its new cars registered in the EU in a given year and must report on its performances by the end of the year.

• Extension of the super credits systems: each new passenger car with emissions lower than 35g/km shall be counted as 1.3 vehicles in the period from 2020 to 2023 (for a maximum of 20,000 registered cars).

• Eco-innovation technologies can still contribute to a reduced CO2 emission target by a maximum of 7g/km, provided that the reduction can be verified and is not part of the standard test cycle. A detailed procedure to approve these technologies will be adopted by the Commission by means of implementing acts.

• Small volume manufacturers (less than 500 registrations in the EU last year) are exempted from the obligation to reach the set targets.

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FIA Region I Position Tackling rising fuel costs

RAC Foundation, 2011

Transport related services are the third highest expense for European households and fuel costs have steadily increased in recent years. In practice, while new vehicle prices followed a decreasing trend, running costs have steadily increased over the past 20 years.

Improving vehicle technology is more than ever key to ensure the sustainability of personal mobility. Expertise from FIA Clubs highlights a steady increase in running costs linked to fuel, despite an adaptation of car usage. According to the research carried out by the Italian Automobile Club ACI, one in five Italians used his car less and yet spent up to 2.7% more in running costs in 20112 (ACI study). Evidence from the UK backs this trend (see below):

Cutting down on long/short journeys

Short distances Long distance

56%

cut down on the number of short journeys they made – 48% for financial or personal reasons.

63%

of drivers combined as many journeys as possible into one – 57% for financial or personal reasons – a significant increase on the 58% doing so in 2010.

49%

cut down on the number of long journeys they made – 43% for financial or personal reasons – up from 42% in 2010.

Source RAC 2012, figures for UK

Multiple journeys

Figures for United Kingdom The European Commission estimates that the 2020 target for cars of 95 g CO2/km implies reductions in annual fuel consumption to private users and business owners of 27% compared with the 2015 mandatory target of 130g. For an average car, the Commission estimates the consumer will save some €340 in the

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first year, and a total of €2904-3836 (depending on the price of fuel) over the car’s lifetime (13 years), as compared with the 2015 target. The higher the oil price, the greater the overall savings will be.

With these consumer and environmental savings in mind, we broadly support the Commission’s proposed targets for 2020.

Technical improvements Evidence from (among others) the European Environment Agency3 indicate that vehicle manufacturers in Europe are likely to reach the 130 g/km CO2 target for 2015, several years ahead of schedule (according to the test cycle currently used). In this context, ambitious targets for 2025 should be set as soon as possible, in order to give manufacturers sufficient lead time to develop tomorrow’s technology, and supporting their leadership in clean technologies. The setting of ambitious targets should foster innovation, contributing to the development of new propulsion systems (electric, fuel cells, hybrids) and also improving the efficiency of the conventional combustion engine in terms of thermal losses, exhaust losses and losses due to accessories (mainly air conditioning related); for example through turbocharging. Further available steps for fighting power loss are light weight optimisation, improved aerodynamics and lower rolling resistance.

While training and infrastructure measures could contribute to maximising the benefits of EU legislation, we believe the 95g/km target should be reached by the sole means of technology improvement, and can be achieved at a relatively low price4.

• Supercredits for fostering innovation We do not support the approach of the Commission to prolong the supercredit systems post 2020, as there are better tools available to promote eco-innovations. Such a system is not justified, as it unduly enables vehicle manufacturers to artificially compensate high emission vehicles.

• Integrated approach to rising fuel costs, and rising CO2 emissions Ambitious targets have a positive impact on consumption. Tightening standards to 95g/km will allow the average consumer to save up to 600 EUR a year in fuel costs based on a driving distance of 20,000 km per year and a fuel cost of 1.4 EUR per litre. In case fuel prices reach 1.8 EUR per litre, they could save almost 800 EUR a year (source: ACI).

In order to promote an integrated approach to rising fuels costs, the FIA and its members will continue to promote eco-driving and inform drivers about alternative technologies as they emerge. In the urban environment, full use should be made of ITS as a tool not only to optimise traffic management but also to lower CO2 emissions. This should decouple the impact of technological improvements, not replace them.

We support more stringent reduction requirements for heavy vehicles than for lighter models. This is justified by the overall footprint of the vehicles. Any increase of vehicle price should be compensated by fuel gains over the lifetime of the vehicle. The principle whereby the emissions target is linked to the average weight of cars registered in the year by a specific manufacturer should be phased out, since it does not encourage manufacturers to design lighter cars.

• Giving realistic emissions’ estimates to consumers While compact cars currently emit around 88g/km according to the New European Drive Cycle, more in depth testing by FIA Clubs shows a value of 135,6g/km (ADAC Ecotest). There is an urgent need to reduce the gap between type approval and real world consumption/ emissions. The RAC future car challenge, organised every year in the UK, also outlines the growing discrepancy between NEDC figures and realworld performance.5 The growing gap between the two figures implies that the announced technological improvements may not deliver the expected benefits for the consumer. In the long run, it will not only

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undermine consumers’ confidence in the rating but also most likely lower their willingness to pay for the future technologies to be developed.

While we understand that the revision of the test cycle underway at UNECE level will correct some of the current bias, a more ambitious European revision of the New European Driving Cycle should be envisaged, in order to bring adequate information to consumers. FIA Clubs have developed testing activities aiming at providing consumers with more accurate information on the consumption of the cars, for example in Spain, Germany, and the UK.

Fédération Internationale de l’Automobile (FIA) Region I FIA Region I represents 106 Touring and Motoring Clubs in Europe, the Middle East and Africa from its Brussels office, which total more than 36 million members. The FIA represents the interest of these members as motorists, public transport users, pedestrians and tourists.

The FIA’s primary goal is to secure a mobility that is safe, affordable, sustainable and efficient. With these aims in mind the work focuses on Road Safety, Consumer Protection, Environmental Protection, and the promotion of Sustainable Motoring.

See more at www.fiaregion1.com.

1

Position on COM (2012) 393 amending EC Regulation 443/2009 to define the modalities for reaching the 2020 target to reduce CO2 emissions from new passengers cars.

Where fuel prices increases represented 2.3%, insurance costs +2,9%, parking costs +5,3%,extraordinary maintenance +8,5%, ordinary -15,2%. Statistics made on a representative sample of the Italian population composed of 6,000 individuals.

2

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3

http://www.eea.europa.eu/publications/monitoring-co2-emissions-from-new

4

http://www.theicct.org/sites/default/files/ICCT_Apr27_ICCT_PM.pdf (page 30)

5

http://www.racfoundation.org/assets/rac_foundation/content/downloadables/the_green_charge-lorf_lytton-270312.pdf

Brussels, December 2012