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Passenger Cars and CO2
 The Legislative Process and Future Developments




                 Patrick ten Brink
     Senior...
Presentation Structure


• Context – history and emissions from transport

• The Passenger Car CO2 strategy and its histor...
The CONTEXT

History and Background




                         3
Transport Sector GHG emissions




                                                                      4
http://dataserv...
Growth in Road Transport contributions




                                                                      5
http://...
Within transport, cars are the main energy user
                             450

                             400        ...
Transport and GHG emissions – a problem sector




                                                                       ...
Transport pollutants – GHGs a key challenge




                                                                     8
htt...
Transport: A Brief History of CO2 issues
    •   1990s: Fuel economy not improving
    •   1993: EU ratifies Framework Con...
Transport CO2: The fundamental challenge


                                                                     Transition...
Passenger Cars CO2 Strategy: 3 pillars
  EU objective: To achieve a fleet average of new passenger car of 120 g
    CO2/km...
Consumer information
system (1999/94/EC)

• labelling of fuel consumption and CO2
emissions

• the production of a fuel co...
Fiscal Measures – nation wide and local
Fuel tax; car tax schemes and the London’s congestion charge

Fuel Taxes
   Petrol...
Progress to Date – Association
level
            190
            185
            180
            175
            170      ...
Manufacturers and C02 emissions
                 Progress at different rates at different times from
                     ...
Who is doing well and badly – depends on how you
          look at it : emissions or emissions reductions
             Gro...
What has been happening ?
                                                        Fleet evolution


     ACEA's quot;wave-...
Progress to Date and shifting targets
                      1995: Comm: passenger car CO2 strategy - target 120g/km by 200...
Developing Ideas on Legislation




                                  19
Revised strategy on CO2 from passenger cars and
               light commercial vehicles 2007

Overall objective: 120 g/km...
Principles for future legislation

Targets and the implementing measures must be:

• Technologically neutral

• Competitiv...
Targets and Instruments (1)


Analysis has     addressed     3   types      of
  TARGET                                   ...
Targets and Instruments (2)


… and at 3 types of INSTRUMENT:
                                       Inflexible
  • Emissi...
Main Target/Instrument Combinations

Car-based
• Each car to meet 130g/km                          Inflexible
• Each car t...
Limits and Targets

• Limit values
   • Set an upper limit above which models are excluded
   • Pros easy to understand an...
Classes and Utility Functions
• These are useful to classify vehicles or normalise
  emissions

• They allow us to recogni...
Applying a Utility Function




                              27
Legal and Institutional Matters
•   Who should be main Obligated Entities?
     •   Manufacturers’ associations?
     •   ...
The Proposal and

   Next Steps




                   29
The Proposal

• A Regulation – administered at Community level
• Obligations placed on car manufacturer holding
  companie...
Points at Issue

Merkel-Sarkozy position
• Seeks to water down the proposal
   • ‘Substantial phasing in’ of compliance
  ...
Legislation in Progress – October 2008
The Parliament
•   Many competing interests in different Committees
•   Vigorous lo...
…then…..and the result?
It then goes into Conciliation with highly divergent positions on all the key
    points, so hard ...
Future Developments
•   Extra legislation on tyres and lubricants
•   Eco-innovations and test cycle
•   Extending the sys...
Passenger Cars and CO2: Past Present & Future
                            The Future – taking a wide vision
              ...
Timeline, Key Points of influence & Actors

              Past                           Short Term                    Med...
Policy Needs & Opportunities (examples)
Development and Lessons                                                           ...
Passenger Cars and CO2
The Legislative Process and Future
          Developments
                    Thank You!
          ...
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PtB of IEEP The CO2 Challenge For Passenger Cars In Europe Lecture at the IES IEEP Climate Change Lecture Series

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PtB of IEEP The CO2 Challenge For Passenger Cars In Europe Lecture at the IES IEEP Climate Change Lecture Series

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Transcript of "PtB of IEEP The CO2 Challenge For Passenger Cars In Europe Lecture at the IES IEEP Climate Change Lecture Series"

  1. 1. Passenger Cars and CO2 The Legislative Process and Future Developments Patrick ten Brink Senior Fellow and Head of Brussels Office Malcolm Fergusson Senior Fellow and Head of Transport Programme, IEEP Institute for European Environmental Policy (IEEP) ptenbrink@ieep.eu mfergusson@ieep.eu www.ieep.eu Brussels 22 October 2008 1
  2. 2. Presentation Structure • Context – history and emissions from transport • The Passenger Car CO2 strategy and its history • Resulting Proposals - instruments, targets and costs • Current status • Future developments 2
  3. 3. The CONTEXT History and Background 3
  4. 4. Transport Sector GHG emissions 4 http://dataservice.eea.europa.eu/atlas/viewdata/viewpub.asp?id=2104
  5. 5. Growth in Road Transport contributions 5 http://dataservice.eea.europa.eu/atlas/viewdata/viewpub.asp?id=2082
  6. 6. Within transport, cars are the main energy user 450 400 Ships Aircraft 350 Rail & inl. 300 shipping 250 Mtoe Cars 200 150 100 Lorries 50 0 1990 1992 1994 1996 1998 2000 2002 road road rail inland navigation air sea 6 Source: T&E Presentation by Jos Dings building on DGENV presentation
  7. 7. Transport and GHG emissions – a problem sector 7 Source: T&E Presentation by Jos Dings; originally from EEA TERM Energy Factsheet
  8. 8. Transport pollutants – GHGs a key challenge 8 http://dataservice.eea.europa.eu/atlas/viewdata/viewpub.asp?id=848
  9. 9. Transport: A Brief History of CO2 issues • 1990s: Fuel economy not improving • 1993: EU ratifies Framework Convention on Climate Change • 1995: EP publishes objective of 120g/km target – Commission publishes passenger car CO2 strategy Regular – target 120g/km by 2005 (or 2010 at latest) analysis of • 1997: Carmakers threatened with legislation progress + of • 1998/9: Voluntary Agreements with manufacturers’ associations potential tools for beyond – 140g/km by 2008/9 the 2008/9 • 2000: Monitoring Mechanism (1753/2000) established target by • 2001: CO2 Labelling required (1999/94) institutes for the European • 2005/6: Review of Passenger Car CO2 Strategy Commission • 2007: Cars 21 and pressure for integrated approach • 2008: New legislative proposal for 120 g/km for 2012, but really 130g/km • 2014: Expect new legislative proposal for 2020 • 2050: Decarbonisation of passenger transport 9 Source: Building on earlier presentation by Malcolm Fergusson
  10. 10. Transport CO2: The fundamental challenge Transition sustainable Past Growth mobility Role of : Reduced vehicle ownership Fewer km travelled / modal shift Better fuels Better technology New technology Change in demand for technology Better driving 10 http://dataservice.eea.europa.eu/atlas/viewdata/viewpub.asp?id=848
  11. 11. Passenger Cars CO2 Strategy: 3 pillars EU objective: To achieve a fleet average of new passenger car of 120 g CO2/km by 2012 (equivalent to 4.5 l/100 km diesel or 5l/100km gasoline) Three pillars Agreements with car industry (recognised self-commitments) Negotiated in 1999/2000 with the European, Japanese and Korean car manufacturers associations (resp. ACEA, JAMA & KAMA) Member States provide independent monitoring data on new cars sold (Dec 1753/2000) Target: 140g CO2/km by 2008/2009 Annual Joint Reports Consumer information Directive 1999/94/EC adopted in December 1999 and amended in 2003 Possible future improvements: harmonised label with energy efficiency classes, and inclusion of light commercial vehicles in addition to cars Fiscal measures July 2005 Commission proposal for a Council directive (COM(2005)261) aims at requiring MS that have taxes to base their calculation on CO2 emissions Currently being discussed in Council Annual Communications to the Council and Parliament - see Commission web pages: EU CO2 and cars strategy: 11 Source: DGENV Presentation http://ec.europa.eu/environment/co2/co2_home.htm
  12. 12. Consumer information system (1999/94/EC) • labelling of fuel consumption and CO2 emissions • the production of a fuel consumption and CO2 emissions guide • displaying posters in car showrooms • the inclusion of fuel consumption and CO2 emissions data in advertising, brochures, etc. 12 Danish Energy Label
  13. 13. Fiscal Measures – nation wide and local Fuel tax; car tax schemes and the London’s congestion charge Fuel Taxes Petrol and diesel taxes and differentials in rates National price “escalators” - eg UK Tax rates for other fuels: CNG, biofuels Car taxes (registration, circulation…) Very different across MS (eg reg. tax v high DK) UK - registration taxes first moved to CO2 rating … others have followed London Congestion charge (started Feb 2003) Covers 21km², 1.3% of greater London Being expanded and price has gone up from £5 13 www.t-e.nu
  14. 14. Progress to Date – Association level 190 185 180 175 170 ACEA gCO2/km JAMA 165 KAMA 160 Grand Total 155 150 145 140 2000 2001 2002 2003 2004 2005 2006 2007 Data Year Association Sum of Registrations Sum of TotCO2 Average (all MS) ACEA 11438448 1810825762 157.2 JAMA 1880842 301273267.1 159.1 KAMA 622697 101007260.3 161.1 Other 15275 3017630.49 196.2 Grand Total 13957262 2216123920 157.7 14 IEEP calculations based on Passenger Car CO2 Monitoring Mechanism data (EU15) to 2007
  15. 15. Manufacturers and C02 emissions Progress at different rates at different times from different starting points BMW 300 Daimler 280 Chrysler Fiat 260 Ford Subaru General Motors 240 Honda gCO2/km 220 Hyundai Mazda 200 Mitzubishi MG Rover Mitsubishi 180 Nissan 160 Porsche PSA Peugeot Citroen 140 Renault Renault Fiat 120 Subaru 2000 2001 2002 2003 2004 2005 2006 2007 Suzuki Toyota Year Volksw agen 15 IEEP calculations based on Passenger Car CO2 Monitoring Mechanism data (EU15) to 2007
  16. 16. Who is doing well and badly – depends on how you look at it : emissions or emissions reductions Group 2000 2006 2007 2000 to 07 2006 to 07 BMW 205.8 183.7 170.3 -17.3% -7.3% Daimler 200.2 187.6 180.9 -9.6% -3.6% Fiat 156.4 144.2 141.3 -9.6% -2.0% Ford 183.1 162.2 161.8 -11.6% -0.3% General Motors 163.5 156.8 155.9 -4.7% -0.6% Honda 194.4 154.2 155.8 -19.9% 1.1% Hyundai 186.2 167.0 160.5 -13.8% -3.9% Mazda 187.0 173.3 170.9 -8.6% -1.4% MG Rover 177.5 179.7 186.3 5.0% 3.6% Mitsubishi 217.1 172.5 173.0 -20.3% 0.3% Nissan 173.4 168.0 166.6 -3.9% -0.8% Porsche 277.0 285.3 285.3 3.0% 0.0% PSA Peugeot Citroen 161.1 142.3 141.1 -12.4% -0.9% Renault 160.3 147.1 146.4 -8.7% -0.5% Subaru 223.2 221.7 218.6 -2.1% -1.4% Suzuki 172.2 166.4 164.1 -4.7% -1.4% Toyota 169.7 153.0 149.2 -12.1% -2.5% Volkswagen 165.3 166.4 163.4 -1.1% -1.8% Grand Total 170.9 160.4 157.7 -7.8% 16 -1.7% IEEP calculations based on Passenger Car CO2 Monitoring Mechanism data (EU15) to 2007
  17. 17. What has been happening ? Fleet evolution ACEA's quot;wave-effectquot; of CO2 categories 130 towards enhanced fuel efficiency (g/km) 120 1995 = 100 >> progress 110 . % of new car registrations . 100 40 1995 35 90 30 1996 25 80 1997 20 1998 1995 1996 1997 1998 1999 2000 2001 2002 2003 15 10 1999 2000 Mass Power Capacity CO2 5 0 2001 2002 Physical ACEA Fleet Characteristics (1995=100) 14 40 16 0 18 0 20 00 25 0 30 0 50 50 12 s 6 8 5 0 les 1-1 1-1 1-1 1-2 1-2 1-3 1-3 >3 2003 Product changes – growth in power, mass and 0+ 12 capacity, complicates CO2 reductions C 2C O ategories (g/km) (source: Commission/ACEA joint report on CO2 and cars, reporting year 2003) From Cars and CO2 Presentation by DGNEV 17 Source: DGENV Presentation
  18. 18. Progress to Date and shifting targets 1995: Comm: passenger car CO2 strategy - target 120g/km by 2005 (or 2010 at latest) 1997: Carmakers threatened with legislation 1998/9: Voluntary Agreements with manufacturers’ associations 140g/km by 2008/9 2000: Monitoring Mechanism (1753/2000) established 220 2001: CO2 Labelling required (1999/94) Car CO2 Strategy 2005/6: Review of Passenger 200 2007: Cars 21 and pressure for integrated approach grammes CO2/km 180 2008: New legislative proposal for 120 g/km for 2012, but really 130g/km 160 140 ACEA target ACEA ? JAMA target JAMA/KAMA KAMA EU target 2010 120 trend ACEA trend JAMA ? trend KAMA EU target 2012 95 g/km ? 100 2020 ? 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2015 18 Source: T&E Presentation by Jos Dings
  19. 19. Developing Ideas on Legislation 19
  20. 20. Revised strategy on CO2 from passenger cars and light commercial vehicles 2007 Overall objective: 120 g/km CO2 by 2012 : ave. new vehicle registrations Instrument: legislative framework Specific targets: Average new car fleet of 130 g/km CO2 Additional 10 g/km by other technological improvements: • Efficiency requirements for air-conditioning systems • Tyre pressure monitoring systems • Low rolling resistance tyres • Gear shift indicators • Mandatory fuel efficiency targets for light-commercial vehicles • increased use of biofuels >> The “integrated approach” Review in 2010 to explore longer term objectives and different approaches beyond 2012 20
  21. 21. Principles for future legislation Targets and the implementing measures must be: • Technologically neutral • Competitively neutral • Socially equitable and sustainable • Equitable to the diversity of the European automobile manufacturers • Avoid unjustified distortion of competition between manufacturers 21
  22. 22. Targets and Instruments (1) Analysis has addressed 3 types of TARGET Flexible • a percentage reduction from a reference year • a sloped target curve linked to utility criteria (see below) • a fixed emissions target to be met by Inflexible all (ie 130g/km) 22
  23. 23. Targets and Instruments (2) … and at 3 types of INSTRUMENT: Inflexible • Emission reduction requirements for individual vehicles • a manufacturer bubble ie manufacturer as a whole can meet the target on average • a trading scheme between Flexible manufacturers 23
  24. 24. Main Target/Instrument Combinations Car-based • Each car to meet 130g/km Inflexible • Each car to meet segment or utility-based limit Manufacturer-based • Each mfr to meet 130g/km • Each mfr to meet x% reduction from year yyyy • Each mfr to meet own utility-based target Fleet-based • As for manufacturer-based, but with trading Flexible 24
  25. 25. Limits and Targets • Limit values • Set an upper limit above which models are excluded • Pros easy to understand and operate • Cons inflexible; can have drastic effects; sensitive • Target values • Set an average value for a fleet • Pros more flexible and ‘fair’ • Cons harder to understand or operate • And needs averaging mechanism 25
  26. 26. Classes and Utility Functions • These are useful to classify vehicles or normalise emissions • They allow us to recognise that ‘big’ vehicles tend to emit more CO2 than ‘small’ ones Market Segments • Pros available and easy to understand • Cons probably unworkable! Utility Functions • Pros much greater flexibility • Cons harder to understand, no ideal metric available, possibility of perverse effects 26
  27. 27. Applying a Utility Function 27
  28. 28. Legal and Institutional Matters • Who should be main Obligated Entities? • Manufacturers’ associations? • Manufacturer groups? • Dealers or importers? • Member States? • Should system operate at MS or Community level? • Commission stated preference for EU-level scheme • … though most legislation works through Member States • What Sanctions to apply? • Exclude from market? • Fines? • Enforced trading between mfrs? • Definitions • What constitutes equal treatment? • How can we reflect past efforts? • How to reflect diverse positions of mfrs in market? 28
  29. 29. The Proposal and Next Steps 29
  30. 30. The Proposal • A Regulation – administered at Community level • Obligations placed on car manufacturer holding companies (ie not individual brands or cars) • A utility function based on weight • With a ‘slope’ of about 65% • Used to calculate a corporate target • To be met by annual sales weighted CO2 of new cars • Increasing fines for non-attainment • Intended to meet 130g/km on average 30
  31. 31. Points at Issue Merkel-Sarkozy position • Seeks to water down the proposal • ‘Substantial phasing in’ of compliance • Further credit for ‘eco-innovations’ • 2020 target of 95-110g/km • Lower fines CARS21 MTR • The 2020 target • Utility Function – weight or footprint? • The test cycle • Towards a global market for cars? • Substantial decarbonisation of road transport by 2050 31
  32. 32. Legislation in Progress – October 2008 The Parliament • Many competing interests in different Committees • Vigorous lobbying from all sides • ‘Flexibility mechanisms’ endorsed by ENVI raporteur • - but voted down by the Committee • Hence EP now pursues essentially the original proposal in negotiations The Council • Only carmaking countries fully engaged • Franco-German ‘Merkozy’ Pact dominates discussion • Italy (and others) have been less involved but have views • Some countries have constructive views re decarbonisation (eg UK) • Then.. 32
  33. 33. …then…..and the result? It then goes into Conciliation with highly divergent positions on all the key points, so hard to see what comes out. • Probably eco-innovation will stay in, maybe • some watering down of the phase-in period ? • reduced fines? • Intermediate wording on 2020 target but no number? Then results to be voted on at First Reading in plenary in both Council and EP, • and as it is a first-reading conciliation text they can only accept or reject wholesale in their first and only plenary vote. • both have problems with their own positions & those of the other party, they could vote it down >> no legislation till new Commission end 2009. The last is not likely, but a very bad omen for the rest of the climate/energy package were it to happen. 33 … and the Result? – we’ll have to wait and see
  34. 34. Future Developments • Extra legislation on tyres and lubricants • Eco-innovations and test cycle • Extending the system to vans (legislative proposal) • Action on HGVs? • More radical measures for cars • 95g/km by 2020? • towards decarbonisation by 2050? • Legislation and implementation of GPP • Review test cycle and explore other real world CO2 measurement approaches (one possible idea: on board measurement and yearly CO2/km and fuel efficiency result in annual vehicle check up, noted on passport) • Driving behaviour/training and links to driving licence • Review of labelling directive and improved implementation • National taxation/subsidy schemes – revision to link to CO2 more effectively and avoid perverse incentives 34
  35. 35. Passenger Cars and CO2: Past Present & Future The Future – taking a wide vision Past Short Term Medium Term Long Term Now Developments & Lessons Planning horizon Strategic Thinking Visions for the Future CO2 g/km Voluntary “agreement” Legislative approach + Path ? Series of Vision: need for + national labelling and national labelling and legislative packages + decarbonisation fiscal measures fiscal measures fiscal incentives + of passenger 200 consumer information transport 180 160 Average g/km CO2 falling, but too “Integrated approach” 140 slowly: Failure of Voluntary 120 “agreement 100 120g/km 80 >> dieselisation, >> electrification Cyp efficiency gains, market >> efficiency, enough? What of Lith SW 35 CR ES Hu Dk Ire Pl Fr downsizing (?), hybrids >> electrification public transport role? B changes 1995 2008 2009 2010 2011 2012 2013 2020 2050
  36. 36. Timeline, Key Points of influence & Actors Past Short Term Medium Term Long Term Now Developments & Lessons Planning horizon Strategic Thinking Visions for the Future 1995 1998/9 2007 2008 2012 2014 2020 2050 EP Proposed Target 120g/km by 2010 Proposed Target : 130g/km by 2012 Decarbonisation of EC transport Ind EC VA - 140g/km by 2008/9 New Leg. proposal will come out EC Ind Ins EC Realisation that VA will not meet targets EP Long term target: 95 g/km by 2020 EP MS EC Legis. Proposal: 130g/km by 2012 + integrated approach + fines NGO EP Envi Committee: support Com Proposal + Long Term target Council / MS French presidency : trying to weaken the proposal 36 Critical Point in the process
  37. 37. Policy Needs & Opportunities (examples) Development and Lessons Past • ACEA/KAMA/JAMA CO2/km “voluntary agreements” – failed to deliver; no hope for VA for future • National approaches re Labelling generally poor; Fiscal incentives variable Action Now Present • Appropriate finalisation of the CO2 for passenger cars legislation • Appropriate finalisation of the low emissions vehicles and GPP legislation • MS Level: progress of fiscal measures, labelling, green public procurement Planning Horizon Short term • Planning for 2014: New legislation for Cars • Analysis, Stakeholder discussions etc. • Putting in place more national measures to support – fiscal measures, labelling etc Strategic Thinking Medium term • What is the maximum feasible sustainable biofuels contribution? • Where to put research funding for technology developments ? • Infrastructure developments : electrification (yes), hydrogen (?), other Planning for the Vision: Long term • Key processes – such as CARS 21 HGL should accept 2050 as a vision horizon and 37 that decarbonisation is an inevitable need and work on sustainable vision for transport/mobility services in 2050
  38. 38. Passenger Cars and CO2 The Legislative Process and Future Developments Thank You! Any Questions? Patrick ten Brink Senior Fellow and Head of Brussels Office Institute for European Environmental Policy (IEEP) www.ieep.eu On behalf of the wider IEEP transport team Malcolm Fergusson, Emma Watkins 38
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