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Friday, December 21, 2007
Disagreement On EU 2012 Auto Emissions Target CO2 Reductions

EU Proposes Auto Emissions Legislation

Germany stated its opposition on Wednesday to the methods proposed by the European Commission for legislation to cut the combined average EU fleet CO2 emissions requirement. The Commission's legislation would require the combined average of all EU vehicle manufacturers CO2 emsiisions to be reduced from today's 160g carbon/km fleet average to 130g carbon/km by 2012. Stavros Dimas, the EU's environmental commissioner conveyed the EU's message that they want Europe to set the tone for the rest of the world by adopting requirements that would make engines much more efficient by 2012 and also promote the use of zero emissions and hybrid vehicles for the EU and the rest of the world.

The proposed 2012 emissions regulations require approval by the EU member states and then would need ratification by the European parliament. The draft legislation would require that financial penalties are paid by manufacturers on all vehicles sold within the EU that do not meet the emissions requirements. The scale of the penalty would start at 20 Euros/gram over the manufacturer's target limit per vehicle sold in 2012, and rise to 35 Euros/g in 2013, 60 Euros/g in 2014, and 95 Euros/g in 2015. The legislation benefits those manufacturers who sell small cars with small engines, as they are able to average these vehicles into the combined total to help them lower their fleet average. For a company like Porsche, that sells primarily high powered higher weight vehicles, and with corresponding higher CO2 emissions, the EU's legislation would cause them to look at completing the acquisition of VW, just so they could include VW's smaller cars and volume sales in their overall combined fleet average.

One of Germany's objections is about the formula used for the reductions and that the legislation targets the vehicle type and the weight as aspects of the required reductions for each manufacturer. The legislation puts emphasis on large vehicles and high powered vehicles for the major weighting element of the overall reductions to achieve an average 130g carbon /km per vehicle sold by 2012. Germany's objection is that this targets Daimler, BMW and Porsche and its auto industry in an unbalanced unfair way as these are manufacturers of primarily larger or heavier vehicles.

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