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Carbon Caps Coming For European Cars

<font face="Arial" size="2">Come to car-crazy Germany if you want to understand why the European Union (EU) is struggling to reduce carbon emissions. Here's where luxury car </font><font face="Arial" size="2">manufacturers Audi, BMW, DaimlerChrysler, and Porsche still make their money from selling cars with top speeds of more than 235 kilometers per hour, and </font><font face="Arial" size="2">where these and other cars continue to tear around the continent's largest race track: the autobahn system.</font>

<font face="Arial" size="2">Transportation is the one sector of the European economy where carbon emissions have been rising rapidly. Motor vehicles generate about one-fifth of the EU's </font><font face="Arial" size="2">total carbon dioxide emissions, compared with almost a third in the United States.Europe's passenger vehicles alone are responsible for around 12 percent of </font><font face="Arial" size="2">the EU's carbon output.<br><br></font>

<font face="Arial" size="2">Germany is the biggest CO2 generator in Europe—a status the European Commission wants to change. It has told the country to reduce its annual carbon-emission level to 453 metric tons from the 482 proposed by politicians in Berlin. And, in particular, the commission has pointed a finger at the country's powerful car-manufacturing sector, threatening to present automakers there and across the EU with a mandate to sell lower-emission vehicles.<br><br></font>

<font face="Arial" size="2">A commission proposal is now on the table that calls for a legally binding limit of 130 grams per kilometer for the average new car fleet built from 2012 </font><font face="Arial" size="2">onward. The plan for a mandatory cap comes after years of bickering over a voluntary limit, which the commission argues has failed.</font>

<font face="Arial" size="2">Under an agreement struck with the commission in 1998, European manufacturers voluntarily pledged to reduce emissions from new cars to 140 grams per </font><font face="Arial" size="2">kilometer (what you'd get from a car with an efficiency of about 39 miles per gallon) by 2008, or by about 25 ­percent of 1995 levels; Japanese and Korean </font><font face="Arial" size="2">makers exporting cars to the EU agreed on the same target, but by 2009. Manufacturers have struggled to meet those pledges. Last year, average emissions from </font><font face="Arial" size="2">new cars sold in the EU were still 160 grams, according to the European Automobile Manufacturers Association—down from 186 grams in 1995 but still 20 grams </font><font face="Arial" size="2">shy of the agreed target just one year away.</font>

<font face="Arial" size="2">The 130-gram limit that the commission now proposes is a compromise. The commission initially wanted 120 grams, corresponding to fuel consumption of 4.5 </font><font face="Arial" size="2">liters per 100 kilometers for diesel cars and 5.1 liters for gasoline cars. But intensive lobbying by European carmakers prompted the EU executive arm to </font><font face="Arial" size="2">agree to the higher limit as part of a deal that calls for a further cut of 10 grams shared with tire makers, fuel suppliers, drivers, and public </font><font face="Arial" size="2">authorities, as well as manufacturers. Rather than focusing solely on improvements in car technology, the shared approach would promote the use of </font><font face="Arial" size="2">alternative biofuels, introduce CO2-based taxation of vehicles and fuels, create programs to change consumers' driving habits, and introduce traffic-control </font><font face="Arial" size="2">systems to avoid congestion.</font>

<font face="Arial" size="2">A strict emissions cap of 120 grams would rule out most models that carmakers Audi, BMW, and Mercedes now produce, not to mention Porsche, the biggest carbon </font><font face="Arial" size="2">emitter. Only three European manufacturers—Fiat, Renault, and PeugeotCitroën, which build smaller cars—are currently on track to meet the 2008 voluntary </font><font face="Arial" size="2">target of 140 g/km, according to the Federation of Transport and Environment, a nongovernmental organization. The Citroën C1, for instance, emits just 109 </font><font face="Arial" size="2">grams. The Society of Motor Manufacturers and Traders, in the UK, warns that tech­nology required to meet the 120 g/km target could add as much as €2500 (US </font><font face="Arial" size="2">$3322) to the price of certain cars—and hurt sales. Other experts have put the figures as high as €4000.</font>

<font face="Arial" size="2">Criticism of the auto manufacturers has come from many quarters. “The car industry has to watch out that it doesn't throw away its future,” says Reinhard </font><font face="Arial" size="2">Bütikofer, the chairman of Germany's opposition Green Party. Arndt Elling­horst, head of automotive research at the investment bank Dresdner Kleinwort, in </font><font face="Arial" size="2">Frankfurt, warns that many top auto executives in Europe, particularly Germany, are engineers who get excited about size, acceleration, and torque and are </font><font face="Arial" size="2">quickly annoyed by talk of climate change. That mind-set, he said, “will have to change.”</font>

<font face="Arial" size="2">The European Parliament and the European Council, representing the heads of the 27 member states, are to vote on the commission proposal later this year, </font><font face="Arial" size="2">with a law expected in early 2008.</font>

<font face="Arial" size="2">The big German manufacturers, as well as U.S. carmakers Ford and General Motors, which have extensive manufacturing operations in Europe, have cautioned the </font><font face="Arial" size="2">EU that its carbon emission plan for cars could force them to cut jobs or move to low-cost countries to cope with rising costs and a tough consumer market. </font>

<font face="Arial" size="2">The European auto industry employs 6 million people, most of them in Germany, France, Italy, and Spain.</font>

<font face="Arial" size="2">But even as manufacturers complain, they are designing fuel-efficient, low-emission vehicles, and some are already delivering innovative concepts. This </font><font face="Arial" size="2">year's Geneva Motor Show was full of cars that have gone green, including ones running on natural gas, electricity, biofuels, batteries, and solar power.</font>

<font face="Arial" size="2">DaimlerChrysler unveiled Bluetec, a new generation of clean diesel engines. The company showed how its new ­emission-control technology, in combination with </font><font face="Arial" size="2">a ­consumption-
optimized four-cylinder diesel engine, can lower emissions while increasing gas mileage. German carmakers and their European rivals continue </font><font face="Arial" size="2">to promote diesel over hybrid gasoline-and-electric auto­mobiles, like the Toyota Prius.</font>

<font face="Arial" size="2">Sweden's Saab, which is owned by GM, showed off the BioPower Hybrid Concept, one of the world's first vehicles to combine a fossil fuel–free ­bioethanol fuel </font><font face="Arial" size="2">(E100) capability with electric-only propulsion.</font>

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