Emissions Price Sting For European Luxury Cars
The Age
Friday December 21, 2007
EUROPEAN luxury cars are likely to cost significantly more from 2012 after the European Commission unveiled emissions targets that will add an average EUR1300 ($A2180) to the price of all cars made in Europe.
In sharp contrast, the US Federal Government on Wednesday overruled an attempt by California to introduce its own emissions laws in what is seen as an attempt by the Bush Administration to help the ailing Detroit-based manufacturers General Motors, Ford and Chrysler.The European car makers have described the proposed emissions laws as unfair, and claim the cost of meeting them will undermine the industry's competitive position and could see manufacturing move to lower-cost regions.A proposed system of fines for manufacturers that do not meet the target would further increase prices.The only Australian vehicle exporter sending cars to Europe, Holden Special Vehicles, does not expect to be affected by the rules."Our cars meet the Euro 3 standards, which are in place to 2009," said HSV's Simon Frost. "We would need to study the implications of the new rules." The new European laws could also divide the industry, with German luxury car makers Mercedes-Benz, BMW and Porsche ranged against compatriot Volkswagen, France's Peugeot/Citroen group and Italy's Fiat, which have lower average emissions."We are not happy," German Chancellor Angela Merkel said in Berlin. "Industrial policy is being made to the detriment of German producers."Share prices of the three German luxury car makers fell after the draft regulations were published, with Porsche shares recording the biggest fall of 3.9%. The draft regulations released by the European Union Commission require that the average emissions of all European cars be less than 120 grams a kilometre by 2012. Car makers are responsible for bringing the emissions down to 130 grams and manufacturers of tyres, air-conditioning systems and other parts must contribute a further 10 grams a kilometre.Porsche's fleet average in 2006 was 282 grams a kilometre while Mercedes and BMW were both about 160 grams.The European industry was particularly incensed by the proposed level of fines for companies that did not meet the target. The penalties would start in 2012 at EUR20 for each gram over the limit, rising to EUR95 for each gram over the limit in 2015.Fiat chief executive Sergio Marchionne, who is president of the European Automobile Manufacturers Association, said the 2015 fine was the equivalent of EUR475 for each tonne of carbon emitted, more than 14 times the estimated EUR33 a tonne other industries were expected to pay for each tonne of carbon emitted at that time. In the US, the Bush Administration, through the Environmental Protection Agency, has thwarted an attempt by California Governor Arnold Schwarzenegger to legislate a 30% cut in carbon emissions by cars.California needed a waiver from the EPA to implement its rule. A total of 17 other states had indicated they would adopt the California target."Governor Schwarzenegger and I are preparing to sue," said Attorney-General Jerry Brown.
© 2007 The Age
