EU Introduces Substantial Reduction in Car Emissions

Reuters reports that the European Union (EU) proposed stricter targets for car emissions and fines for non-compliance on November 8. The proposal also encourages the use of electric vehicles. Deutsche Welle adds that the European Commission wants new cars to produce 15 percent less CO2, which will become a 30 percent requirement five years later. Failure to meet the new targets will engender fines of up to $110 for every gram of CO2 above the limit. Moreover, the European Commission is aiming to reduce greenhouse gas emissions, specifically from transport, by at least 40 percent below 1990 levels by 2030.

The proposed legislation was met with substantial opposition, and tough lobbying from the auto  industry, which would feel the effects from the implementation of such a policy most strongly. The European Automobile Manufacturers’ Association (ACEA) described the new targets as “overly challenging.”

In spite of the emission scandals that its automotive industry recently experienced, Germany was the most vocal in opposing the new law. German foreign minister Sigmar Gabriel told Reuters that emission cuts could result in job loss and a reduction in growth. As Deutsche Welle reports, this sector employs 800,000 people, produces approximately 15 million vehicles annually, and accounts for 20 percent of the German GDP. According to Deutsche Welle, Matthias Wissmann, head of the German car industry lobby VDA, contacted Jean-Claude Juncker in order to apply pressure. In the call, the German automobile industry’s objections to the new legislation.

For the EU, such legislation would also serve as a counterweight to the rise of China, as there is fear that if the European automobile industries do not develop electric vehicles, they will fall behind significantly. Such concerns were voiced by the Vice President of the Commission Maros Sefcovic, who considers the use of Chinese electric cars by taxis in Brussels worrisome. Likewise, EU climate Commissioner Miguel Arias Canete told Reuters that the goal is to bring the European automotive industry “back in the race for global leadership on clean vehicles.” The International Council on Clean Transportation (ICCT) endorsed his opinion and argued that ambitious CO2 targets could lead to more “electrified vehicles.”

This legislation could have a significant effect on the EU. The reduction in emissions could not only have a beneficial impact on the environment, but could also herald an era of vehicles running on electricity, a development that could boost the competitiveness of its economy. Oef course, legislators need to overcome the opposition of the powerful lobbies of the automotiv industry, most of which represent German interests, the most dominant economy of the EU.