The European Commission's grand strategy for the EU to lead the world in fighting climate change and switch to a low-carbon economy was in disarray on Tuesday -- less than two weeks after it was set out with a loud self-congratulatory fanfare.
The first fruit of that strategy -- a legislative plan to force the European car industry to cut carbon dioxide emissions from new cars to 120g per km by 2012 -- was due to be presented today. Instead, commission President Jose Manuel Barroso shelved it in the face of contradictory proposals from two of his senior colleagues at the environment and industry departments.
As green campaigners condemned Brussels for failing to deliver on its first "real-world" policy since setting an ambitious target of cutting greenhouse gases by at least 20 percent by 2020, commissioners fell out over the best way to achieve that target in the car industry. German ministers holding the EU presidency admitted their coalition government was not only at loggerheads with carmakers but was also divided itself.
A senior German source in Brussels highlighted the rifts, saying: "If we force a target of 120g per kilometer on each new car, we would have to close DaimlerChrysler, Audi, BMW and Porsche and that's not possible. We have to make Europe the leader in green technology while boosting output and jobs."
The British car industry and its European counterpart waded into the row. Car prices in Europe could soar if legislation forced the cuts envisaged, the UK's Society of Motor Manufacturers and Traders (SMMT) warned. ACEA, its continental equivalent, said legislation on making car engines more efficient would add up to 4,000 euros (US$5,100) to the price of each new car. That could drive production of small cars overseas and be ten times less effective than a wider package of measures to cut emissions, it argued.
European Commission Commissioner for Environment Stavros Dimas proposes forcing carmakers to improve engines and cut emissions, but European Commission Vice President Gunter Verheugen wants a larger package of measures to include wider use of bio-fuels and green incentives for drivers.
The two have not even contacted each other in recent weeks. German Federal Environment Minister Sigmar Gabriel said he had not discussed the issue with fellow German social democrat Verheugen and flatly contradicted a central plank of the vice president's alternative plan.
Barroso, desperate for consensus within his 27-strong commission, said proposals for binding legislation to enforce the 120g target by 2012 would be presented "very soon" -- possibly next week. But Dimas' proposals to legislate on engine technology alone will now be complemented by other measures such as greater use of bio-fuels.
It is accepted across the commission that the European car industry has no prospect of reaching its voluntary target, set in 1995, of cutting emissions to 140g by next year.
The industry average in 2005 was 163g and is unlikely to fall much below 160g by next year. So legislation on a tougher target is required, although Japan, the frontrunner in green cars, has set an unambitious target of just 138g by 2015.
Verheugen is believed to have persuaded Barroso that full legislative proposals can come only after an "impact assessment," requiring at least a year's work.
He insists Dimas recommit to their jointly agreed policy that the cars package embrace alternative fuels, tires and lubricants; measures to ease congestion; and even driver behavior, or adopting policies to encourage car owners to switch to greener vehicles.
This is the "integrated" approach favored by the SMMT and ACEA, whose ferocious lobbying, including stark warnings on jobs, appears to have won the day. Gabriel said the German government also favored including bio-fuels but ruled out "driver behavior" as effectively privatizing the issue -- and rejected proposals favored by Verheugen to include cars in the EU's emissions trading scheme as "too complex" and "technically impossible."
The disarray among policymakers was heightened when it emerged that there was no consensus on how the 120g target would be applied. An option favored by German ministers is to set targets according to the class of vehicle, with tougher ones for smaller cars.
Green campaigners said failure to announce legislation to meet the 120g target "would seriously undermine the commission's credibility" and that making alternative policies such as bio-fuels count towards the target weakened it.
Claude Turmes, a Green MEP, said: "Only by introducing binding limits will we properly address the climate-damaging fumes spewed by cars. The commission ... must not cave in to the car lobby."
The SMMT said legislation backed by fines would force the industry to switch to hybrid models -- vehicles with both internal combustion and electric engines -- "overnight." Hybrid models are about US$5,800 more expensive than their conventional equivalents, say officials.
Christopher Macgowan, SMMT chief executive, called for an integrated approach involving the industry, governments and consumers.
"We are calling for practical measures, based on the principle that working together will deliver the greatest benefits for the environment, without crippling the European car industry with unrealistic targets and disproportionate costs," he said.
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