boilingspot: Economic turmoil could scupper EU climate plans

New Scientist staff and Reuters, NewScientist.com news service, 03 October 2008

As if the European Union's attempts to curb carbon dioxide emissions had not drawn enough criticism, the current economic turmoil is bringing further attempts to weaken European climate protection policies.

Global automakers urged EU authorities today to reconsider proposed limits on CO₂ emissions from cars, arguing that the current financial crisis is going to make it even harder to meet them.

"You can't pile on regulation on an industry during its worst time in the last 10 years," Fiat Chief Executive Sergio Marchionne told reporters while visiting the Paris Auto Show, which opens to the public on Saturday.

The financial crisis is expected to worsen an already bad situation for US and European car makers, who have seen sales plummet in recent months.

Caps on cars

Car makers have long been critical of the proposal from the European Commission to cap emissions at 130 grams per kilometre per vehicle by 2012, saying it would cost them too much money to upgrade the technology under the hood in such a short period of time. The average current CO₂ emission from a car in the EU is 158 g/km.

There had been a move in the European Parliament to lower fines for non-compliance and stagger the timing of the deadline, but it was rejected by the environment committee.

France, which currently holds the rotating presidency of the EU, has proposed phasing in the limits up to 2015, with lower fines for car makers that narrowly miss the target.

Poland, meanwhile, has assembled a blocking minority among EU member states, which could stall Brussels' climate package in an attempt to protect national industries.

Horsepower trading

Poland and Greece reached an agreement late on Thursday, following a similar accord with Hungary, Slovakia, Romania and Bulgaria, insisting that more debate is needed on the EU's proposed climate measures.

The European Commission aims to cut CO₂ emissions by a fifth by 2020, compared to 1990 levels. Building up a blocking minority could force it to seek a compromise on the plan.

"Poland's Environment Minister Maciej Nowicki signed in Greece an agreement referring to the climate package," Joanna Mackowiak, of Nowicki's cabinet, told Reuters late on Thursday. "We have the blocking minority."

Under the EU's voting rules, some decisions may be blocked by a certain number of member states representing enough voting power.

Emission auction

The European Commission proposes full auctioning of CO₂ emission permits as of 2013. The six states want to delay this, arguing their power plants will not have enough cash to compete with giants like Germany's E.ON on the free-market auctions.

At present, industry gets some permits for free and companies have to buy additional ones only if they exceed their granted quotas.

"This minority refers only to the auctioning," a source responsible for the negotiations told Reuters on Friday, adding the EC would now try to lure particular countries away from the group.

"It's not the biggest success when you build up a blocking minority. It's when the minority sticks together to the very end", said the source.